Corporate Reporting blog

New beginnings and happy memories

Christmas is almost upon us and I suspect for many it cannot come soon enough. 2011 has been a challenging year on many fronts and for many it's been liberating in the true sense of the word. The current economic prognosis, particularly in Western Europe, indicates that our patience and resolve are going to be severely tested for many years to come. My own sense is that we're entering a period of fundamental change where the western world will be forced to rethink and re-calibrate many established norms, both in business and in the way we live our lives. In particular, there will be a significant shift in living standards and the things we use to measure success. This might sound threatening and gloomy, but it does not need to be. It might mean success isn't a larger plasma screen, or a new car on the drive...after all what's important doesn't need to be determined on this basis, just ask the Japanese.

2011 will also be significant for me. After 33 years at PwC I have decided to retire.  For the past 15 years or so I have been championing the cause of corporate transparency and the need for a new corporate reporting. It’s been the centre of my life, it has provided the opportunity to meet some wonderful people around the world, and I've had a lot of fun. But there comes a time to move on and I've always promised myself it would be when I was 55 years old. That's now. I have a lot of other passions I want to pursue and I'm looking forward to the future with relish.

It seems such a long time ago that it all started with ValueReporting, a concept which in hindsight was a decade or more ahead of its time. But the essence of ValueReporting lives on and much of its thinking can be found in today’s integrated reporting model. I remember the mantra we used in those early days: “You can’t value what you can’t see” which was reinforced by a picture of an iceberg. This thinking has remained central to the challenge facing corporate reporting ever since but I sense we are now close to embracing a model that can help us see below the water line. 

It was 2007 that I started this blog and I can honestly say writing it has given me enormous pleasure and I hope the community that follows it has found it insightful and interesting.  I am thrilled to say that my colleague Charles Bowman will be taking over future authorship of the blog.  Charles is a seasoned professional and a close colleague; he is passionate of the need to keep corporate reporting and audit relevant and I know he'll do a great job in moving it forward.

And finally, as I move on to pastures new, I would like to take this opportunity to thank you all for your company and engagement over the years and to wish you all an enjoyable Christmas and a happy 2012.

Charting the future - Why the IIRC's work is so critical

As someone who has spent most of his working life trying to improve corporate reporting, I think it is critical that everyone involved in this space clearly understands the value of the IIRC's work and its discussion paper.  Put simply it provides a vision of the future, a clear sense of the direction in which reporting should be moving. This vision is, I believe, something around which companies, investors, policymakers, regulators and standard setters can engage and critically start to consider the procedural, structural and institutional implications for the reporting system we have today. We must be clear that what the IIRC has developed is a response to a market need, driven by innovating companies which recognise that the way both mainstream and sustainability reporting has evolved is not sufficient to meet changing economic, social and market needs.

The ambition of the IIRC is to make the case for a change to the mainstream model and if successful to put itself out of a job.  But to do this, those who are responsible for the system need to consider how this type of model can evolve in a structured, valuable and logical way. This is not about ignoring all that is good about financial and other aspects of reporting today, but it is about creating a new integrated reporting model that focuses on what is strategically important and material to understanding a business’s long term sustainability.   Is the vision of integrated reporting in the discussion paper the answer?  The answer is no. Should we be rushing to introduce new standards tomorrow? Again the answer is no. But we do need a reporting blueprint to help inform and guide the reporting innovation that is taking place in the marketplace.

This is what the IIRC has started to create and which will be greatly informed by the pilot company programme. This blueprint, even in its current form, can equally help policymakers, regulators and standard setters think through the implications for the evolution of regulatory reporting and the mandates and skills needed within the core institutions on which the reporting system relies.

At a time when many aspects of the capitalist system are being debated, when domestic agendas dominate the thinking of many policymakers and technocrats, it’s interesting to see how much global interest and engagement there is around the IIRC's work and integrated reporting. We should covert this position, the IIRC's ambition and momentum, the collaborative nature of its endeavour and recognise success as its ability to find consensus and shape global thinking. 

As always I am pleased to hear your views and comments on the postings and to take questions about corporate reporting. 

David