The first of two posts on the future opportunity we will gain by working with the IIRC initiative. These were triggered by recent comments to me by Kenan Jarboe on this work, so I went to investigated a little further
How do we engage within our own internal organizational communities? How do we communicate our sense of purpose to the outside world? How do we integrate all the activities we are (or should be) undertaking as responsible leaders?
Are we working towards understanding the material sustainability issues better and linking them to financial drivers and where we fit within these complex issues?
There is such an increasing need to develop or simply updating our business language to build stronger cases for change, improvement and broader community engagement but these still seem to be missing. How are organizations aligning their organizations not just with their own strategies but those in the wider world that contribute into a more sustaining future? We are needing to answer a fair few of these questions in my opinion.
The lack of engagement, of common understanding
Within each corporation there is this overwhelming need and growing concern to engage, to engage our employees, provide them a clearer sense of purpose and offer a better understanding of what a ‘higher’ purpose they are working towards looks like in their language not just through the eyes of the corporate board. How does the external world perceive us, how do we attract new investment, greater stakeholder engagement. How can we achieve this in better ways than we are doing today?
Many of those traditional measures of purpose left over from the 20th century are simply not working. The social contract between employer, employee and their communities has broken down and this ‘sense of drift’ is certainly making it far more difficult to galvanize each part of the renewing growth equation – including government – to fix it, to be part of a common united sense of solution that connect and resonate across all ‘vested’ parties.
The Integrated Reporting movement (www.theiirc.org )
I’m not sure how aware we all are on the work being undertaken under the auspices of the integrated reporting . is a process that results in changing the communication mechanisms provided by an organization, most visibly a periodic integrated report, about value creation over time. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long-term.
Arguable much of the change to achieve Integrated Reporting needs to be driven by companies themselves and the development of the IIRC framework is enabling companies to shape the process based on their own experiences.
A useful starting place to pick up on this
A useful report to initially read is ‘Understanding transformation: Building the business case for Integr... that set out to understand the processes that companies go through as they move towards Integrated Reporting. The organisations participating in the research are at different stages but all are involved in the IIRC’s Pilot Programme, which aims to help develop an International Integrated Reporting Framework
The work being presently undertaken
Over 100 global businesses and 50 institutional investors are directly involved in the IIRC’s work. This includes some of the world’s most iconic brands, such as Coca-Cola, Clorox, Microsoft, Hyundai, Tata, Unilever, Marks and Spencer, SAP and National Australia Bank.
Their engagement within the Pilot Programme are trialling the principles, content and practicalities of the Framework for two years to provide feedback and build business momentum towards its implementation.
By tracking their experiences over the two-year duration of the pilot, the aim is to capture the changes and benefits of adopting Integrated Reporting. This will help to build the business case for a wider shift towards Integrated Reporting and help to generate support among key stakeholders, including internal audiences, boards, investors and regulators.
The business and investor benefits of <IR> are seemingly compelling.
According to latest reports, the empirical evidence from the IIRC Pilot Programme shows that enables the articulation of strategy and how the business is creating value over time. This information potentially provides the new lifeblood of capital markets. enables a better communication of the material factors that create value over the short, medium and long term. It works towards investor decision-making and the efficient allocation of capital, essential aspects needed for us all to understand.
The question is where does that fit for the parts derived from the intangibles and IC?