IFAC committee publication on governance and sustainability
The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has issued a publication which uses case studies to analyse how professional accountants in business support the performance of their organisations by integrating governance into the key drivers of sustainable organisational success.
The report, entitled Integrating Governance for Sustainable Success, seeks to address how professional accountants can assist to build good governance into the entire cycle of strategic planning, resource utilisation, value creation, accountability, and assurance.
The report posits that an effectively integrated, enterprise-wide governance, risk management, and internal control system:
- integrates and aligns activities and processes related to planning, risk management, policies/procedures, culture, competency, internal audit, financial management, monitoring, and reporting; and
- supports executives/managers in moving an organisation forward in a cohesive integrated and aligned manner to improve performance, while operating effectively, efficiently, ethically, legally, and within the established limits for risk.
In the report's discussion on effective and transparent communication, it is noted that the enlarged economic, environmental, and social footprint of many organisations causes a greater demand from various stakeholder groups for accountability or environmental, social and governance (ESG) information. These factors, combined with complexity in reporting and regulation hve led to increasingly voluminous, complex, and compliance-focused business reports.
Accordingly, the report suggests that current reports should be expanded into more connected and holistic business reports that integrate the various economic, environmental, and social aspects of an organisation into one cohesive explanation of the business. The report notes the International Integrated Reporting Framework, under development by the International Integrated Reporting Council, will play a role in helping organisations in this respect.
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