IIRC Pilot Programme Investor Network recommendations for preparers of integrated reports

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23 Oct, 2013

The Pilot Programme Investor Network (“the Investor Network”) of the International Integrated Reporting Council (IIRC) has identified a number of recommendations to assist preparers of integrated reports (“The 2013 Investor Critique”). The recommendations stem from a recent review of “selected reports” from the Pilot Programme Business Network (“the Business Network”).

The aim of the review was to “understand the strengths and shortfalls of today’s reporting from the perspective of providers of financial capital”.  In total the reports of 21 pilot businesses were analysed by 14 institutional organisations. 

The Investor Network recommended that report preparers should: 

  • Disclose the materiality assessment process used to determine the level of disclosures made in the report.
  • Ensure that all information within the report is connected.  The 2013 Investor Critique provides examples such as “grouping related themes” and “drawing explicit links between strategy and other content elements such as the external environment, performance, future outlook and business model”.
  • Be concise by using, for example “plain language over wordy explanations” and limiting repetition.
  • Provide information that allows investors to assess long-term value creation.  The 2013 Investor Critique provides examples such as “providing a clear overview of the business model”, “indicating the timeframe associated with key strategies, milestones and targets” and ensuring that there is alignment between the report and other key disclosures such as the financial statements and management commentary.
  • Be credible.  The 2013 Investor Critique suggests that this can be achieved, for example, by making the report “balanced and unbiased” and providing insights “as opposed to a simple restatement of information found elsewhere”.  The reports would also be credible where the information can be substantiated “by credible third party” sources. 

Aside from these recommendations, the 2013 Investor Critique provides insights that the investors involved in the critique particularly value reports which convey “a more holistic picture of performance that goes beyond financial statement performance alone” and that, for their investment analysis, the most useful parts of the reports would be those providing information on strategy, risk, governance, operations and future targets. 

The full “2013 Investor Critique” can be found here (link to the IIRC website).    

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