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Regulations

Framework consultation launches to drive uptake of nature-related financial disclosure globally

Dec 05, 2019

In 2019, the Climate Disclosure Standards Board (CDSB) announced the launch of a consultation with the aim of accelerating the rate of nature-related financial disclosures at scale by organisations globally and exploring the role of the CDSB Framework in facilitating this.

Review the press release and consultation on the CDSB's website.

Boomer’s blueprint: Entrepreneurial leadership

Nov 27, 2019

On November 27, 2019, Accounting Today published an article on how leadership has always been important, but is critical during the transformation of a profession.

Entrepreneurial leadership has its own characteristics, both good and bad depending upon your perspective. Entrepreneurs are also associated with innovation, and every accountant should realize that all innovation starts as a bad idea — at least to those it disrupts. Therefore, innovation management is becoming a required skill where a person has the unique ability to make things happen “from idea to making it real,” and then it requires an innovation team to make it scale.

Review the full article on Accounting Today's website.

IFAC Launches "Exploring the IESBA Code"

Nov 26, 2019

On November 26, 2019, the International Federation of Accountants (IFAC) released the first installment in a new informational series to promote the Code of Ethics.

Professional accountants and other business professionals are often faced with complicated, real world situations that are not black and white and demand pragmatic and ethical solutions. To help address these challenging situations, IFAC released a new series titled: Exploring the IESBA Code.

Through twelve monthly installments, Exploring the IESBA Code will take an in-depth look at the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).  Each installment of the series will highlight different aspects of the Code in real-world situations, in a manner that is relatable and practical. A special focus will be placed on recent revisions to the Code.

The first installment of the Exploring the IESBA Code deals with the five Fundamental Principles of ethics, which establish the standard of behavior expected of all professional accountants - a standard which enable accountants to uphold their responsibility to act in the public interest.

Review the press release and new series on the IFAC's website.

Calculating the value of impact investing

Nov 25, 2019

In 2019, the Harvard Business Review (HBR) released an article on how as concerns about scarcity and inequality become increasingly urgent, many investors are eager to generate both business and social returns—to “do well by doing good.” One avenue is impact investing: directing capital to ventures that are expected to yield social and environmental benefits as well as profits.

But there’s a problem: Although the business world has several universally accepted tools, such as the internal rate of return, for estimating a potential investment’s financial yields, no analogue exists for evaluating hoped-for social and environmental rewards in dollar terms. Forecasting gains is too often a matter of guesswork.

Investors hoping to use a company’s track record on social and environmental impact to assess future opportunities will similarly find little useful data to evaluate. The reporting of environmental, social, and governance issues is now standard practice at nearly three-quarters of the world’s large and mid-cap companies, but it is usually confined to information about commitments and process and rarely scores actual impact on customers or society.

Review the full article on the HBR's website.

 

Filling the Pipeline: Advancing More Women into the C-suite and on Corporate Boards

Nov 20, 2019

In 2019, the Conference Board released a publication asking why have we not seen significant results from diversity and inclusion programs geared toward women? Why are we not seeing more representation in the C-suite and senior leadership roles?

Traditional D&I programs only scratch the surface of what it takes to help women move ahead. For one thing, women need both male and female sponsors—having only other women as mentors can hold them back. Further, many programs have been too focused at an individual level—effectiveness requires a holistic corporate-wide approach because, without a culture change within and throughout an organization, “second-generation” gender bias, stereotypes about women’s leadership abilities, and lack of access to male networks will continue to systemically impede women’s advancement.

Review the publication on the Conference Board's website.

Integrated thinking, reporting and sustainability

Nov 19, 2019

On November 19, 2019, Accounting Today released an article on how we work with standards and systems that are entirely wrapped around the notion of protecting the investor and the returns due to them. However, these views are being challenged and we see it in current political debates around the world.

Individuals are critical of the short-termism that current systems encourage, and they are reflecting on how to change things for the better. Now the focus is upon shifting to wider societal obligations — how to deal with the current issues of jobs and employment, long-term profitability, sustainability and the implementation of technology? These real issues are the ones that past business leaders have not had to deal with. However, they represent an opportunity for the accounting profession to play a role in engaging with clients, businesses and colleagues, to help society evolve so it becomes resilient for the long term.

Review the full article on Accounting Today's website.

Thoughts on the BRT Statement on the purpose of the corporation

Nov 18, 2019

On November 18, 2019, the National Association of Corporate Directors (NACD) published a blog that discusses the Business Roundtable's (BRT) new “Statement on the Purpose of a Corporation.”

The new statement is, in many ways, a reversion to the BRT’s 1981 “Statement on Corporate Responsibility.” The 2019 statement supersedes the 1997 “Statement on Corporate Governance” which had declared that “the paramount duty of management and of boards of directors is to the corporation’s shareholders.” None of this, of course, is news to the regular readers of the financial press. The new statement has received a tremendous amount of attention from investors, journalists, academics, and politicians. It will be carefully considered by public company management teams and boards of directors, even those not part of the BRT.

Review the full blog on the NACD's website.

IAASB seeks public comment on exposure draft of conforming amendments to the international standards as a result of the revised IESBA Code

Nov 15, 2019

On November 15, 2019, the International Auditing and Assurance Standards Board (IAASB) released an Exposure Draft focused on conforming amendments to the International Standards as a result of the revised International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code). Comments are requested by January 10, 2020.

The project aims to align the IAASB’s International Standards with the revisions to the IESBA Code by way of conforming amendments, thus ensuring that the IAASB's International Standards can continue to be applied together with the IESBA Code.

This project falls under the umbrella of IAASB-IESBA coordination, a strategic commitment of the two Boards, and builds on their overarching commitment for enhanced connectivity and coordination to better serve the public interest.

Review the press release and Exposure Draft on the IESBA's website.

How and why human capital disclosures are evolving?

Nov 15, 2019

On November 15, 2019, the Harvard Law School Forum on Corporate Governance and Financial Regulation released an article on how the talent paradigm is shifting.

A company’s intangible assets, which include human capital and culture, are now estimated to comprise on average 52% of a company’s market value. At the same time, the nature of work is rapidly evolving, new generations are reshaping the workforce and businesses are redefining long-term value and corporate purpose through a stakeholder lens. In this era of disruption, talent and culture have leapt to the forefront of thinking around enabling strategy and innovation and creating long-term value. Accordingly, human capital has rapidly emerged as a critical focus area for stakeholders.

Review the full article on the Harvard Law School Forum's website.

Alignment on risk management is dangerously askew

Nov 15, 2019

On November 15, 2019, the National Association of Corporate Directors (NACD) released a blog on how boards are under increasing pressure from investors, regulators, and the general public to adapt to and better manage the factors that influence how organizations are created, grow, and succeed—and to do so with transparency and accountability. This requires unparalleled collaboration and harmony of purpose among those charged with risk management.

But findings from a new Institute of Internal Auditors (IIA) report paint a troubling picture that is anything but harmonious. Worse yet, the report’s key findings suggest that boards generally have an overly optimistic—and potentially dangerously skewed—view of how risks are managed.

Review the full blog on the NACD's website.

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