HOW TO LEAVE THE KITCHEN SINK OUT OF YOUR INTEGRATED REPORT

HOW TO LEAVE THE KITCHEN SINK OUT OF YOUR INTEGRATED REPORT

Every organisation has an overabundance of information itching to find to its way into your integrated report. One of the most difficult challenges any compiler faces is deciding what to put in and how much of it to include. It’s tempting to just include everything you get your hands on – that way everyone in the organisation will be happy for the recognition for their work and you’ll have a report the size of the Encyclopaedia Britannica justifying your organisation’s worth – but this is where the guiding principles from the King III Code (and now King IV) will hold you in good stead. 

So, let’s start right at the beginning with the International Integrated Reporting Council’s definition of integrated reporting (which our own King IV aligns with):

An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term.

The King IV Report on Corporate Governance for South Africa 2016

The key words in bold give you most of the guidance you need.

  • ‘concise’ – there it is, right at the beginning of the definition so you know it’s important. You need to be brief, short, succinct, to the point.
  • ‘strategy, governance, performance and prospects’ – here’s the meat of your report and the framework you’re going to hang it on.
  • ‘external environment’ – the context in which you operate is key.
  • ‘creation of value’ – this is where the combination of financial and non-financial information comes into play.
  • ‘short, medium and long term’ – now you have a timeframe from which to consider all of the above.

An organisation can choose to apply one of two concepts in their integrated approach, both of which provide pathways to integrated thinking and sustainable development and give you the opportunity to nicely structure your content:

1) the Triple Context of economy, society and environment (usually for the combined external environment in which the organisation operates), or

2) the Six Capitals (for a more detailed for nuanced perspective) which includes financial, manufactured, intellectual, human, social and relational and natural capitals.

And don’t forget, the point of an integrated report is to give a balanced and honest view of the business and King IV encourages organisations to report on the positive and negative activities.

The whole point of integrated reporting, according to former Harvard Professor Robert Eccles, “is to ensure that an organisation is forced to look at and report on the resources it consumes, the wastes it creates, the human capital it uses and develops, the way it manages risk and the communities it helps or disrupts… [T]he reporting, he says, has the potential to be a mechanism for not just articulating actions more clearly but for spurring them, too.”

This is ultimately what you want to demonstrate in your integrated report.