12 March 2018

ACCA: Business leaders must embrace the broader benefits of integrated thinking

Companies reporting under the International Integrated Reporting Framework have, for the most part, made striking progress in quality over the last year but there’s scope for businesses to reap more benefits by embedding integrated thinking into internal decision-making processes, according to ACCA.

In Insights into integrated reporting 2.0, ACCA worked for the second year running with the IIRC to review a number of corporate reports, and then to provide practical insights for improvement and development.

“There has been a lot of progress in the quality of integrated reporting since last year’s review (see Insights into integrated reporting 2016),” said Yen-pei Chen, subject matter expert – integrated reporting at ACCA.

“We are seeing increasing use of consistent performance measures from year to year, emerging bases for comparison between organisations, and a reduction in the average length of reports.”

However, the report also notes that new challenges have come to light, including: linking strategy through to the way the business uses and affects key resources; the description of the board’s role in enabling value creation; discussions about the organisation’s outlook; and the application of materiality.

“Although the <IR> Framework addresses reporting practice, for many organisations integrated reporting has driven wider organisational changes: from redefining business models, to changing strategic planning processes and updating internal performance targets,” added Chen.

“There is a real opportunity for business leaders to use the process of integrated reporting as a means of developing better- informed leadership and more coherent governance. A well-prepared integrated report crystallises thinking about the business’ key value drivers: investors like to see this information, but this insight also helps business leaders – including CEOs and CFOs – to identify and act on risks and opportunities.”

The report also encourages business leaders to be ‘active advocates’ in engaging and educating the whole organisation and stakeholders throughout the integrated reporting process.

Full press release

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