Integrated reporting (IASB only)
The IASB held an education session to discuss Integrated Reporting (IR). The staff provided a brief history of the International Integrated Reporting Council (IIRC), noting that this was established (under the name of the International Integration Reporting Committee) to oversee the creation of a globally accepted Integrated Reporting framework. The staff noted that the role of the IIRC Board is to direct the IIRC’s affairs and oversee coordination and interaction between the Council, the Working Group and the Secretariat as well as with external stakeholders and other parties. It was noted that there is IASB representation on the Council, the Working Group, the Technical Task Force and within the Technical Collaboration groups.
It was noted that the IIRC was currently working on a draft framework for integrated reporting. One IASB member asked what the ultimate goal was – to develop concepts or to try to develop specific standards that would apply to Integrated reporting. The staff noted that it was envisaged that a set of standards would be developed in order to ensure a framework and consistency for the Integrated report – he noted that there would likely be standards for environmental reporting and corporate governance developed. It was noted that South African companies listed on the South African stock exchange are required to prepare an Integrated report. It was also noted that the concept of Integrated reporting was evolving and relatively new process and there were still discussions as to what Integrated reporting was designed to replace.
One Board member noted that there were lots of companies that did provide a large annual report containing such things as management commentary, corporate governance and hence questioned what the difference between what was already prepared and an Integrated report. The staff noted that an Integrated report should be distinct and concise. The staff noted that there was currently a debate as to whether Integrated reporting adds to the reporting burden or is intended to replace parts of an annual report that is currently prepared – the staff member noted that this could take the form of an extended management commentary up front (discussing environmental impacts, etc.) followed by the financials. The staff noted that the objective of Integrated reporting was to try to create a more holistic and balanced view of the company being reported upon bringing together material aspects such as strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates. It is the expectation that only material areas will be reported on.
Another Board member noted that a danger with the whole project was that companies would see the Integrated reporting as a substitute for fully reporting, for instance the environmental and social impact of their business.
The staff noted that the Integrated report is primarily aimed at investors. It was expected that a draft framework setting out the key principles would be published on 16 April for a 90 day comment period. It is then expected that this will lead to a finalised framework for Integrated reporting.
No decisions were made by the Board.