The Bruce Column — Paul Druckman looks back over five years of achievement

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18 Nov 2016

Five years can bring about an immense amount of change. Paul Druckman has just stepped down as chief executive of the International Integrated Reporting Council.

And in a video interview with Robert Bruce he has reflected on what has been achieved in that time under his leadership. 

Probably his most important achievement over those years is how the concept of integrated thinking is now moving towards being a mainstream benefit of an integrated reporting system. Under Druckman’s vigorous encouragement the reporting system which companies operate has evolved into something which is not just a means of communicating what a company has done and how it has done it but a lead motivator for change within companies. He sees it as part of what he calls ‘a new information architecture’ which will sit well alongside and within changing attitudes in the corporate governance world. Once everything was geared around the financials, he says. Now we are seeing a broader form of value creation with integrated reporting, a multi-capital system, which will drive a more inclusive and responsible capitalism. It is no longer simply about trust and KPIs, or about delivering a broader based prosperity. It’s about all three. And, he underlines, the momentum is probably unstoppable.

Druckman’s five years as chief executive have all been about that momentum. He feels that at the outset they had the right idea at the right time. And bringing about a coalition of ideas around a common aim meant that early adopters of integrated reporting provided the encouragement and example. And off the back of that the cumulative effect of its growth has been influential. He argues that the implementation of the concept of a Strategic Report in the UK would not have been as successful without the ideas that the growth of integrated reporting had brought into the mainstream. And the influence has been worldwide. He points to the strength and success of integrated reporting in, for example, Japan, in Singapore, and in Germany.

One of the great strengths of the integrated reporting model is, he says, the fact that the integrated reporting framework is not a product. It is a mission-driven system. It has not relied on regulatory imposition of any sort. And, as he repeatedly said during his five years as Chief Executive the process has been an evolution, not a revolution. It is a shift to a world of trust, transparency, credibility and understanding. It needs regulatory support but the jury is out whether it needs reporting standards to encourage a degree of uniformity in its practice.

But he does feel some disappointment from his five years that at times development, momentum and innovation were partly blunted by ownership issues. Organisational egos sometimes got in the way, he said, and efforts could be stifled by organisations doing great things but not connecting up.

And as Druckman stepped down there were three areas he drew attention to as being both successful but needing further attention. The recently established Corporate Reporting Dialogue is one. This has been, he says, one of the biggest achievements of the IIRC. It too has been about bringing the standard-setting, financial and sustainability worlds together after years, as he points out, of being very siloed communities.

The second is the need for the accounting profession to embrace the changes integrated reporting is bringing about and to embed them in the educational processes of accountants. He sees the profession as being at a point of great soul-searching at the moment. Are they primarily compliance people? Will much of their work eventually be done by robots? Or will accountants go back to earlier days when they fulfilled the role of trusted advisor to business? He sees integrated reporting and integrated thinking as being fundamental to the role of being a trusted advisor, a professional accountant.

And the third part of the great changes he identified is simply in the transformational power of integrated thinking. Integrated thinking, he says, is articulated by an integrated report but value creation cannot be achieved by only a report. It has to be embedded in the business. Producing an integrated report changes behaviours. It really makes you think, he says. It asks what value you have created. It enables companies to make changes in their structure and their management. But it also acts as a tool which encourages people to challenge their strategy and what they are doing. It is a very different way of embedding and bringing about change.

And as for Druckman’s future he envisages a bit more golf and reducing the almost constant travelling around the world to exhort, encourage, and build momentum. Instead he sees himself in a role of looking at the broader areas of corporate reporting and the development of the capital markets system. For him it is all about delivering a broader based prosperity. Hardly a modest goal.


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