BIGGER PICTURE REPORTING MAKES GOOD BUSINESS SENSE
Companies listed on the JSE, SOEs, NGOs and other acronyms who use other people’s money, issue an integrated report at the end of their financial year. Because it’s a requirement.
But even if it wasn’t mandatory, would South Africa’s leading corporations go through all the trouble of putting together a (usually hefty) tome comprising their financial and non-financial information combined with strategy, insights and context each and every year? You bet they would. Because it makes good business sense.
In essence, integrated reporting is “an approach that helps businesses think holistically about their strategy and plans, make informed decisions, manage key opportunities and risks to build investor and stakeholder confidence, and help manage the organization’s performance” – International Federation of Accountants.
The beauty of following the principles of integrated reporting is that, in order to be able to report on your annual progress and standing in this way, you first need to embed integrated thinking into your organisation. These are some of the benefits companies have already been experiencing from doing so:
The big picture transforms from a stick drawing to a work of art
Integrated reporting compels all the pieces of the puzzle to come together, slotting into place to create a unified and coherent whole. A whole that tells a complex story, that divulges obscurities and that sheds light around every corner and on every crevice. This holistic view afforded to management exposes all the information that’s relevant, that’s meaningful and shows the result of how it all converges enabling them to consider the organisation’s future viability and ability to create value.
Value creation (or destruction) becomes crystal clear
Now that the big picture is clear and easily decipherable, finding the value (or lack of value) is more straightforward. Although the integrated report includes financial information, this is not the sole form of value considered in compiling the report. Non-financial information provides context and a broader perspective for the financial information and the six capitals open up thinking beyond the numbers.
The silos come a-tumbling down
The word ‘integrated’ really does give the game away. Within the organisation a comprehensive approach to coordination across business segments, processes, information silos and internal groups is critical. You won’t be able to achieve integrated thinking and, indeed, integrated reporting without being fully unified and cohesive.
Your measurement cuts the mustard
There’s an old saying that goes you get what you measure. With an integrated approach you’re guaranteed of separating the wheat from the chaff and measuring what’s important.
No more fence-straddling or hemming and hawing
Decision-making becomes a walk in the park when you’re measuring the right things and you have the information you need at your fingertips. Management understands the impact of decisions across the business and decision-making time is reduced.
Read more on integrated reporting:
KING IVTM AS EASY AS 1, 4, 5, 6, 7, 8, 17
Six key features of integrated reporting according to King IV are outlined and explained.
HOW TO WRITE YOUR COMPANY’S INTEGRATED REPORT
Before you put pen to paper, have a read through this article for tips on the big picture, the finer detail and the framework that will hold it all together.
HOW TO LEAVE THE KITCHEN SINK OUT OF YOUR INTEGRATED REPORT
More is not always better; especially when it comes to reporting on your company’s performance. Here we unpack the definition of integrated reporting so you know exactly what needs to be included and how much of it.
THE IMPORTANCE OF CORRECT SPELLING IN YOU’RE INTEGRATED REPORT
Seven common mistakes made in writing that you don’t want to see in your integrated report.
DIGITAL ANNUAL REPORTS: ARE YOU BEING LEFT BEHIND
How to use a digital report to your advantage.