International Integrated Reporting Council (IIRC)
The information on this page is organised as follows:
- Overview of the <IR> Framework
- Related news
The International Integrated Reporting Council (IIRC) (previously the International Integrated Reporting Committee) was formed in August 2010 and aims to create a globally accepted framework for a process that results in communications by an organisation about value creation over time.
The IIRC brings together a cross section of representatives from corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors as well as civil society. It comprises a Steering Committee, a Working Group and a three taskforces (dealing with content development, engagement and communications, and governance).
The IIRC is chaired by Professor Mervyn King, Chairman, King Committee on Corporate Governance and Former Chairman, Global Reporting Initiative. Membership includes Hans Hoogervorst (IASB Chairman), Leslie Seidman (FASB Chairperson), Maria Helena Santana, (Chairperson, IOSCO Executive Committee), Göran Tidström (IFAC President), Jim Quigley (former global Chief Executive Officer of Deloitte), and many others. Paul Druckman is Chief Executive Officer.
In November 2011, the IIRC announced a number of changes to its organisational structure. Under the new arrangements, an initial transitional phase until the end of 2013 will see the IIRC supported by a strengthened secretariat operating through a not-for-profit company established for the purpose under the same name.
The company's board will comprise Mervyn King as Chairman, Leslie Ferrar (Treasurer, Household of the Prince of Wales and the Duchess of Cornwall) and Christy Wood (Chairman of the Board of Governors, International Corporate Governance Network) as Deputy Chairs, together with Ian Ball (Chief Executive, International Federation of Accountants), Ernst Ligteringen (Chief Executive, Global Reporting Initiative), Jessica Fries (Director, The Prince's Accounting for Sustainability Project) and the IIRC's Chief Executive, Paul Druckman.
A Governance Committee has also been established, with responsibilities relating to audit, nominations and executive remuneration for the company.
At the time of its formation, the IIRC's stated objective was to develop an internationally accepted integrated reporting framework by 2014 to create the foundations for a new reporting model to enable organisations to provide concise communications of how they create value over time. After a consultation process, the IIRC published the first version of its 'International Integrated Reporting <IR> Framework' (<IR> Framework) in December 2013.
Integrated reporting (stylised by the IIRC as '<IR>') is seen by the IIRC as the basis for a fundamental change in the way in which organisations are managed and report to stakeholders. A stated aim of <IR> is to support integrated thinking and decision-making. Integrated thinking is described in the <IR> Framework as "the active consideration by an organization of the relationships between its various operating and functional units and the capitals that the organization uses or affects".
The <IR> Framework expresses the IIRC's vision in the following way:
The IIRC's long term vision is a world in which integrated thinking is embedded within mainstream business practice in the public and private sectors, facilitated by Integrated Reporting (<IR>) as the corporate reporting norm. The cycle of integrated thinking and reporting, resulting in efficient and productive capital allocation, will act as a force for financial stability and sustainability.
The objectives for integrated reporting include:
- To improve the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital
- Provide a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors that materially affect the ability of an organisation to create value over time
- Enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their interdependencies
- Support integrated thinking, decision-making and actions that focus on the creation of value over the short, medium and long term.
There are three fundamental concepts underpinning <IR>:
- Value creation for the organisation and for others. An organisation’s activities, its interactions and relationships, its outputs and the outcomes for the various capitals it uses and affects influence its ability to continue to draw on these capitals in a continuous cycle.
- The capitals. The capitals are the resources and the relationships used and affected by the organisation, which are identified in the <IR> Framework as financial, manufactured, intellectual, human, social and relationship, and natural capital. However, these categories of capital are not required to be adopted in preparing an entity’s integrated report , and an integrated report may not cover all capitals – the focus is on capitals that are relevant to the entity
- The value creation process. At the core of the value creation process is an entity’s business model, which draws on various capitals and inputs, and by using the entity’s business activities, creates outputs (products, services, by-products, waste) and outcomes (internal and external consequences for the capitals).
The <IR> Framework sets out the purpose of an integrated report as follows:
The primary purpose of an integrated report is to explain to providers of financial capital how an organization creates value over time. An integrated report benefits all stakeholders interested in an organization’s ability to create value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators, and policy-makers.
The ‘building blocks’ of an integrated report are:
- Guiding principles – these underpin the preparation of an integrated report, informing the content of the report and how information is presented
- Content elements – the key categories of information required to be included in an integrated report under the Framework, presented as a series of questions rather than a prescriptive list of disclosures.
The table below summarises each of these building blocks, together with the other key requirements for an integrated report:
|High-level summary of the requirements for an integrated report|
A history of developments in the publication of the <IR> Framework is summarised below:
|12 September 2011||Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century published||Comment deadline 14 December 2011|
|October 2011||Initial organisations participating in the IIRC Pilot Programme announced||The Pilot Programme is a two-year programme for a group of companies who will work as a network of peer group organisations, exchanging knowledge and sharing experiences on integrated reporting.|
|July 2012||Draft Outline of the Integrated Reporting Framework||Not part of the formal consultation process, but the IIRC welcomed feedback|
|November 2012||Prototype of the International Integrated Reporting (<IR>) Framework||Not part of the formal consultation process, but the IIRC welcomed feedback|
|16 April 2013||Consultation Draft of the International <IR> Framework published||Comment deadline 15 July 2013|
|9 December 2013||International <IR> Framework published||Available on IIRC website|