Australia: Integrated Reporting and how the power of integrated reporting will mean better business ahead
These were the words of Mel Ashton, President, Institute of Chartered Accountants Australia (ICAA) in his foreword to their latest publication on <IR>. He wrote, "Organisations taking this approach are reporting considerable benefits and stakeholders are better able to evaluate an entity’s performance over a longer time by having access to the bigger picture. Integrated reporting will become increasingly necessary as a broader variety of stakeholders demand greater transparency and accessibility."
<IR> is a key topic for discussion at the ICAA's Business Forum 2014 currently taking place in four cities across Australia, with businesses and investors from the IIRC Pilot Programme speaking about the benefits of <IR>. The power of integrated thinking in breaking down silos and ensuring enhanced communication to stakeholders both internally and externally was a central message in National Australia Bank's presentation in Melbourne.
John Stanhope, co-chair of the Australian Business Reporting Leaders Forum also spoke, saying "Integrated Reporting gives us an opportunity to reduce volume and complexity of reporting and provide more useful information to stakeholders."
Damien Walsh, CEO, bankmecu, will address the ICAA's forum in Brisbane and describes the value that <IR> brings to his organization, stating, "Ultimately it is about improved and more complete communication which will help forge stronger communications between our bank and its customers - and that's good business."
The evolution of corporate reporting is taking hold in Australia, as businesses recognise its importance in unlocking value and attracting capital. The Australian Stock Exchange recently announced the third edition of its 'Corporate Governance Principles and Recommendations'. An important change of terminology from 'financial reporting' to 'corporate reporting' has been included in this revision, which crucially recognises the need to broaden the scope of reporting to more than financial information.
Another key revision is the enhanced approach to risk. It recommends that entities ensure they consider and manage their risks for not just financial information. This new recommendation will encourage businesses to consider all of the capitals that they use and affect, and will have a significant positive impact on disclosure by listed Australian companies. Other changes include greater flexibility for organizations to make their governance disclosures online rather than in their annual reports, thereby cutting complexity leading to streamlined annual reports. These are all important steps in the evolution towards <IR>.