Corporate Reporting Gets a New Framework for the 21st Century

Corporate Reporting Gets a New Framework for the 21st Century

It could be argued that companies providing more information about their environmental impact, such as carbon and water footprints, is making corporate reports too long and cluttered.

Businesses trying to tackle this problem have now put together a framework to enable them to provide investors and stakeholders with pithy but comprehensive corporate reports.

The International Integrated Reporting Committee (IIRC) published the new framework yesterday, and it will be road-tested from next month. An accompanying discussion paper will show how to encourage more firms to adopt integrated reporting.

The IIRC, which consists of representatives from the corporate, investor, accounting, securities, regulatory and standards-setting industries, will also consult with businesses on the proposed framework over the next few months.

IIRC chairman Sir Michael Peat, who is also principal private secretary to Prince Charles and the Duchess of Cornwall, explained that the new framework is designed to adapt reporting to the changing needs of investors in the 21st century.

"The range of issues - economic, environmental and social - which determine an organisation's success has never been broader or more pressing," he said. "It is for this reason that we need an approach to reporting that is fit-for-purpose in the 21st century. The world has changed - reporting must too."

Peat added that the challenge is to publish concise and clear reports that are shorter, rather than longer, than they are now.

"All matters which are important in assessing an organisation's performance and position, past and prospective, need to be reported but not by making annual reports ever longer and more complex. They are too long already," he said.

"The information needs to be provided clearly and concisely with the connections between financial, environmental and social impacts demonstrated and the clutter removed."

This article originally appeared on BusinessGreen, and is reprinted with permission.

Photo CC-licensed by gadl.