Adopting integrated reporting (IR) can trigger significant changes to corporate behaviour, including better engagement with stakeholders and decision making, according to research from the International Integrated Reporting Council (IIRC) which is embarking on a new push to make the approach mainstream
Paul Druckman, CEO, IIRC said: ‘It is crystal clear from this new research that adopting IR is leading to important breakthroughs in organisations’ understanding and articulation of how they create (and destroy) value - a staggering 92% of respondents say it has improved their understanding of value creation. It is also encouraging to see that IR can give investment professionals more confidence and enhance their analysis.’
According to the report, Realizing the Benefits: The Impact of Integrated Reporting, 91% of all respondents have seen a positive impact on external engagement with stakeholders, including investors. Of those that have published at least one integrated report, 87% of businesses believe investors better understand their strategy.
In addition 79% of respondents reported improvements in decision making, 68% reporting a better understanding of risks and opportunities, and 78% identified better collaborative thinking by the board about goals and targets.
Further research released from PwC in the report, PwC’s Corporate Performance: What do investors want to know?, found that nearly two thirds of investment professionals (63%) believe that the quality of a company’s reporting – including information about strategy, risks and other drivers of value - could have a direct impact on its cost of capital.
The IIRC study of participants in a three year programme to develop and test the International IR Framework was conducted in partnership with corporate communications specialists Black Sun and involved a network of 140 businesses and investors from 26 countries.
The research will be discussed at the fourth annual IIRC Pilot Programme Conference, which starts today in Madrid. The event will see the launch of a new IR Business Network to encourage widespread adoption of this approach to corporate reporting.
Druckman said: ‘Businesses from all parts of the world are joining this network, to drive the global adoption of IR and ensure it remains relevant for all regions and industry sectors.
'As businesses start to use IR as a tool to better understand the connections between key resources and relationships that contribute to their success, to manage risks and opportunities, and as a result make more informed decisions, the real value of integrated thinking and the integrated report for businesses will be realised.’
