The Bruce Column — Putting integrated thinking at the heart of business

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05 Jul 2017

The latest report from the International Federation of Accountants, (IFAC), puts the integrated thinking which lies at the heart of integrated reporting as one of the critical elements in building trust and confidence in business and government. Our regular columnist, Robert Bruce, reports.

Uncertain times need constructive thinking which can hold the hope of change and strength ahead. And in particular there is a need for public trust to help the process. IFAC, representing the global accountancy profession, has put together the thinking that it hopes will help. A new report, ‘Build Trust. Inspire Confidence’ (link to IFAC website), puts forward a call to action by G20 countries. In a joint statement its President and its CEO say that: ‘Governments must promote coherent public policy and a consistent, transparent regulatory environment that inspires confidence while enabling progress. Professional accountants continue to play a crucial role enabling capital flows, economic activity, and higher standards of living’. They call for a series of actionable recommendations, a policy consensus backed up by tangible implementation and cooperation amongst G20 countries. 

One of these recommendation is the use of integrated reporting.  ‘Integrated reporting’, says the report, ‘is an opportunity to focus on long-term value creation, and improve on a largely fragmented, complex, and compliance-driven system’. The way forward, says the report, is through harnessing the techniques of integrated thinking. ‘Integrated reporting’, says the report, ‘is founded on integrated organisational thinking and more likely to align capital allocation and corporate behaviours to the wider goals of financial stability and sustainable development’. It urges the G20 to action.

The report cites a recent survey carried out by the South African Institute of Chartered Accountants to illustrate how integrated thinking can improve decision making. 74% of executives, the report says, and 93% of non-executive directors were of the view that integrated thinking had improved decision-making at management level. And 72% of executives and 86% of non-executive directors thought integrated thinking had improved decision-making at board level.

Introducing the changes IFAC is advocating would, it says, ‘bring about a more coherent corporate reporting system, relevant to today’s business environment, that aligns outcomes with the G20 priorities of building resilience, improving sustainability, and assuming responsibility’.

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