integrated reporting – simplified & south african trends alex hetherington - benefits beyond...

Integrated Reporting –

Simplified & South African Trends

ALEX HETHERINGTON - Benefits Beyond Compliance

Accelerate Cape Town

March 09 2012KPMG, Cape Town

Is it a minefield?



Agenda

1. Context

2. Objectives & Outcomes of Integrated Reporting

3. Differences from traditional reporting

4. South African trends

5. Key issues

• Relevance & materiality

• Stakeholder engagement & assurance

• Style & clarity

2. King Code of Governance Principles for South Africa 2009 (King III) – best practice


Context

1. Companies Act (2008) – “to act in the best interests of the company”.

3. Integrated Report – form of communication with all stakeholders


Objectives of Integrated Reporting

To demonstrate …

1.Organisational overview; business model & governance structure

– How do we create & sustain value and make decisions2. Remuneration policies

3. Understanding the operating context

- What are the circumstancse under which we operate?4. Objectives; competencies; KPIs

- Where do we want to go; How are we going to get there.5. Organisational performance

6. Future performance objectives


Tell the organisation’s story to the market.

– Obtain capital at a reasonable rate

– Enhance corporate reputation

– Maintain licence to operate

Outcomes of Integrated Reporting


Key differences

Feature Traditional Integrated

Trust Narrow disclosure Greater transparency

Stewardship Financial All forms of capital

Thinking Isolated Integrated

Focus Past; Financial Past & future; Connected

Timeframe Short-term Short, medium & long-term

Adaptive Rule-bound Responsive to circumstances

Concise Long & complex Concise & material

Technology Paper-based Technology enabled

Negatives1. Hesitation on King III 2. Non-financial reporting still weak - quantitative data

- reluctance to set targets3.Materiality not well defined4.Assurance still elusive


South African Trends

Positives

1.Increasing uptake

2.Early days – no definitive best practice

3.GRI 3.1. being used as sustainability framework

4.Improvement in remuneration disclosure

5.Improvement in stakeholder engagement


Critical issues

Relevance & materiality

1. Engage with stakeholders

2. Relevant to stakeholders

3. Influence the decision-making of stakeholders

Fact: Only 11% of IRs disclosed their methodology for determining materiality in non-financial information


Critical issues

Stakeholder engagement

1. Identify stakeholders“those groups who affect, or could be affected, by an organisation’s activities, products or

services and performance”

2. Prioritise stakeholders

3. Engagement strategy

Assurance

1. Dominated by IFA (ISAE 3000) & AccountAbility (AA 1000AS)

Fact: Only 27% of companies furnishing independent assurance.


Critical issues

Concise & clear style

1. Limited use of jargon

2. High use of visual illustration

3. Not long

Thank you

Alex HetheringtonTel: 021-671-9883

[email protected]/alexhetheringtonwww.alexhetheringtonsustainabilityblog.com

integrated reporting – simplified & south african trends alex hetherington - benefits beyond...

Documents