From integrated reporting to integrated decision making?

12 June 2014

By Brian Furness

Simon Seymour and I hosted our quarterly UK 100 Group Finance Forum 3 June. The discussion topic over dinner covered the role of finance in driving integrated decision making in an organisation. We've all heard of integrated reporting and although it's difficult to do for many given the data challenges it really is at the sharp end of the corporate reporting agenda. During our discussions though we took it one step further and looked at how organisations can move to integrated decision making.......a much bigger challenge but one that puts finance at the heart of strategic decision making.

The discussion centred around how you balance the social, environmental, financial and economic impacts of business decisions in addition to merely looking at the effect they have on revenues and other financial indicators for the entity itself. Obtaining a more holistic view to support decisions rather than looking at a traditional (and often narrow) business case allows you to understand the outcomes and impacts of decisions on your social and environmental footprint in the widest possible sense. Being able to quantify these impacts allows you to evaluate options and optimise the trade-offs inherent in every decision you face and Malcolm Preston talked our guests through the TIMM (Total Impact Measurement and Management) framework developed by PwC which is now being used across a wide range of industries to support decision making.

The framework lets you see the impact on items such as water use, health, education, community cohesion and tax contributions of the decisions we make daily some of which, such as major, multi-year investment programmes, have very long term benefits or costs associated with them. For me, understanding this bigger picture of the social, environmental, financial and economic impact of decisions is going to be one of the most important aspects of business in the future. These items will need to be managed and understood if you are going to be able to explain your decision making in a world where internet rumours spread like wildfire and the public's perception of your decisions can really damage your reputation.

However, even after it finally dawned on me there was a need for an alternative framework for decision making the accountant in me still had doubts as I still couldn't get past the fact that no-one had been able to explain to me how you actually measure this stuff and enable people to visualise the impact of their decisions.......our discussion convinced me though that by using the TIMM framework it can actually be done!

If you are interested in what was discussed please contact us. These dinners are part of a series of events under our Finance Matters programme. This programme brings together leaders in finance to exchange ideas on the challenges and opportunities shaping their markets, functions and careers. Click on the link to find out more about the programme - www.pwc.co.uk/financematters

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