Progress report: on the first anniversary of the publication of the International Integrated Reporting Council's IR framework, Charles Orton-Jones gauges the extent to which it has been adopted around the world.
| Author | Orton-Jones, Charles |
It's been a year since the international integrated reporting (IR) framework was formally launched, so how is it faring? Last July CIMA surveyed 350 senior executives in North America, Asia Pacific, Africa and Europe to determine the initial response to it. Although 80 per cent agreed that IR could help to deliver success for their businesses, only 44 per cent said they were thinking about adopting it in the near future--most of whom estimated that the process would take two to three years. Two motivations for adopting IR stood out: the desire to give investors enough information (only a quarter of those polled said they were already doing this) and the chance to benefit from explaining how their businesses created value (cited by 94 per cent of respondents).
These numbers suggest that there's a groundswell of support for IR, but that widespread adoption will be a gradual process. The International Integrated Reporting Council--of which CIMA's chief executive, Charles Tilley FCMA, CGMA, is a member (and chairman of its technical task force)--is happy with the progress of its framework so far. The rate of adoption has not only met expectations, reports Neil Stevenson, the council's MD, global implementation; it has exceeded them.
He points out that IR has already been trialled in 25 countries. According to a poll of adopting companies published by his organisation last September, 91 per cent said that IR had improved the quality of their engagement with external stakeholders, including investors; 87 per cent said that investors understood their strategies better; and 70 per cent said that finance providers had greater confidence in their businesses' long-term viability. Stevenson cites the support offered by international bodies ranging from the World Bank to the United Nations as proof of the global appeal of IR.
"What really strikes me is the fast pace of adoption in Brazil, Malaysia, India, South Africa and Singapore," he says. "These are all important economies for the future. It is great that they are seeing IR as a way to develop."
But some are more cautious in their verdicts. While CIMA's head of corporate reporting policy, Nick Topazio ACMA, CGMA, believes that "IR is the future of corporate reporting", he observes that its benefits are not yet understood widely enough. "If it were a slam-dunk, everyone would be doing it. It does need to be explained," he says, adding that investors are still waking up to this relatively new concept...
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