Friday Nov 29, 2024
Friday Nov 29, 2024
Monday, 30 December 2013 01:13 - - {{hitsCtrl.values.hits}}
thoughts and outlined the relevance and importance of this subject.
“Integrated Reporting brings together the material information about an organisation’s strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates. It provides a clear and concise representation of how an organisation demonstrates stewardship and how it creates value, now and in the future.
“In other words, an integrated report tells the overall story of the organisation. It is primarily a report to stakeholders on the strategies being adopted, the risks the organisation is facing, the opportunities it is pursuing, and details of its operations, performance and activities in a manner that allows them to assess the ability of the organisation to create and sustain value over the short, medium and long term.”
Explaining further he said: “A properly designed set of performance measures reported on as part of regular management processes gives organisations the incentive and ability to improve performance, allowing a company to better understand, manage and report on multiple dimensions of value.”
During the workshop Jayaram pointed out methodologies that can be adopted to formulate an effective integrated report that would reflect an appreciation of the organisation’s ability to create and sustain value based on financial, social, economic and environmental systems and by the quality of its relationships with its stakeholders.
He suggested that the elements to be included should be the organisational overview and business mode that explains what the organisation does and how it create and sustain value in the short, medium and long term.
Another important area was the operating context, that included the risks and opportunities that outlines the circumstances under which the organisation operates, including the key resources and relationships on which it depends and the key risks and opportunities that it faces.
Also to be included were strategic objectives that showed the strategies adopted and the manner in which the organisation would achieve them. Another key aspect to be included was governance and remuneration.
Another key area outlined was performance objectives that indicated how the organisation performed against its strategic objectives and the future outlook that takes into context the opportunities, challenges and uncertainties the organisation was likely to encounter in achieving its strategic objectives.
Jayaram said that whilst many of these components were familiar, the business model element deserves some discussion as it introduces the concept of the businesses’ interaction with external factors and its relationships and use of resources. Elements to be considered were the six capitals that businesses may use such as, financial, manufactured, human, intellectual, natural and social.
Jayaram also said that an integrated report should also be tailored to the entity’s specific circumstances to have a greater degree of transparency and also recommended that auditing integrated reports is necessary for greater reliability as well as encouraging consistency. He said further that boards need to take responsibility for driving the organisational change towards integrated thinking and for ensuring the content of their corporate reporting meets the required information needs.
Accounting for value creation he said sits at the heart of integrated reporting ,which is about accounting for value changes within a business over the course of a set period, typically a financial or calendar year.
Jayaram commended ACCA for conducting such workshops as a part of their research and insights initiatives. He said it provided an important opportunity for relevant industry personnel to meet, discuss, enhance their knowledge and further explore the intricacies involved in integrated reporting.
