WORKSHOP on INTANGIBLES, INTELLECTUAL CAPITAL & EXTRA-FINANCIAL INFORMATION – an Untilled Field Ian Ball International Integrated Reporting Council September 2014
NGOs Companies Investors Accounting Standard setters Regulators Chair: Prof Mervyn King CEO: Paul Druckman Who is the IIRC?
Business Network Investor Network IIRC Pilot Programme
Why : More than financials
International Framework The Framework
The Framework: Core features Content Elements Fundamental Concepts Guiding Principles Value Creation for the organization and for others The Capitals The Value Creation Process
The Framework: Fundamental Concepts The Value Creation Process
The Framework: Core features Content Elements Fundamental Concepts Guiding Principles
The Framework: Guiding Principles Strategic focus and future orientation Connectivity of information Stakeholder relationships Materiality Conciseness Reliability and completeness Consistency and comparability Underpins preparation Informs content Presentation of information Judgement is needed
Questions to be answered Unique story Connections apparent Not a set sequence Not isolated, standalone sections The Framework: Content elements Organizational overview and external environment Governance Business model Risk and opportunities Strategy and resource allocation Performance Outlook Basis for preparation and presentation General reporting guidance
Discussion Paper Prototype Framework Emerging Database Building the Business Case for Background Papers for IIRC Pilot Programme Yearbooks The Framework journey so far… Basis for Conclusions Summary of Significant Issues The Framework journey
Discussion Paper Prototype Framework Emerging Database Building the Business Case for Background Papers for IIRC Pilot Programme Yearbooks The Framework journey ahead Basis for Conclusions Summary of Significant Issues Framework Development Guidance and Practice Thought leadership Academic community Databases Evidence Base
Votorantim link to their Report 2012
- Global Uptake
South Africa endorses the Framework
Sasol annual integrated report 2013
set for take-off in Singapore
DBS Bank Annual Report 2013
promoted by G100 and major Superannuation Funds
Stockland Annual Review 2013
Brazilian Stock Exchange calls for “Report or Explain” on Integrated Reporting
Itaú Unibanco Integrated Report 2013
European Commission hails as “step ahead”
Eni Annual Report 2013
crucial part of ‘Japan’s Revitalization Strategy’
Lawson, Inc. Integrated Report 2013
Harvard Business School study hails as enabler of financial stability
Prudential 2014 Proxy Statement
India: Lab backed by CII
“We have established a task force consisting of cross functional members representing the key functions of the organization to develop this integrated report. This task force will develop understanding of the process of value creation in terms of the financial, manufactured, human, intellectual, social and natural capitals. The concepts of connectivity and value creation will improve the organization’s systemic thinking and increase its efficiency with the changing environment.”
UK Guidance on Strategic Report consistent with
HSBC Annual Report 2013
Malaysian Prime Minister declares business take up of
The World Bank implement
Recommendation to G20 on
Where do intangibles fit? Why the untilled field? Does the field have well-defined boundaries? What count as good examples? How do we identify the best “measures”? The “unique story”/comparability trade-off Intellectual capital, human capital and social and relationship capital – does the categorization work?
Final Comments Attribution theory – In reporting – In relation to outcomes Public sector application – Initial focus of – Pioneer network Regulation – Not yet…
Eni
Omron on intellectual property
International Integrated Reporting Council