Integrated Reporting - Step 3: Collaboration and Innovation

The Internet offers an excellent medium for companies to enhance their strategic communications and collaboration with investors and other stakeholders, as well as for sparking innovation. In fact, innovation is often inspired by unexpected voices that bring a fresh perspective to solving a particular need. Web 2.0 technologies and social media tools encourage an intimate dialogue with people both inside and outside a company’s normal circle of colleagues and customers. They can foster teamwork, thereby enhancing productivity. In addition, businesses can seek input from people in other industries and with different perspectives who may approach the challenges in a completely different way. The Canadian Institute of Chartered Accountants (CICA) is undertaking research to promote effective communication by providing helpful guidance for "Using the Internet in Corporate Reporting." The booklet "Practical Guidance for Managing Collaboration and Innovation" is available as a discussion draft on the CICA website.

Integrated Reporting - Website Data Tool

A company website data tool is a standalone feature designed to compile, isolate, export and display publicly-available data spread out through multiple disclosure sources according to users’ preferences. It is based on data that a company determines will be valuable to users. A data tool allows users to create and store customized data lists, tables and charts, but should not permit them to overlay multiple, disparate data points for comparison. For an example, refer to the PotashCorp DataTool (illustrated) and view the explanatory DataTool Demo Video.

Integrated Reporting - Website Data Packaging

To respond to stakeholder information needs, a company website should be viewed holistically as a data mart. The data is organized largely according to packages that have evolved over a long period of time within the paper paradigm, such as annual reports, financial statements and management discussion and analysis. It is now time to rethink the communication of the data and question whether the traditional data packaging best serves the information needs of users. It is also important to think about how the data can be repackaged to make them more useful to investors and other stakeholders. In this way, users can get at the package or report and quickly find the information they need. Specific data items are pre-selected by the company and the package or report is then posted on the website. A webpage could also be considered as a package of data items. For example, refer to the "Investor Briefcase" package on the PotashCorp website.

Integrated Reporting - Website Data Categories

Technology, particularly the Internet, has altered the way information is presented and communicated. Traders, institutions, analysts, agencies, governments and regulators alike all use the data available online as they go about their daily business. In response, companies are shifting from a document-based business culture to one that is based on access to data. Website data categories may include, for example: About, News, Investors, Customers, Sustainability, Governance and Careers. These categories offer a compromise for the dissemination of general purpose information and the delivery of data to meet the specific needs of stakeholder groups, such as investors and customers. For an example of these data categories, as either a first-level or second-level menu category, refer to the PotashCorp website.

Integrated Reporting - Step 2: Company Websites

The Internet is widely acknowledged as a key medium for communicating with investors and other stakeholders, such as customers and job seekers. They have become accustomed to using company websites to obtain the information they need for their particular purposes. The usefulness of company websites is determined by the information content, which users should find unambiguous, timely and relevant. The 2008 CICA research study on Corporate Reporting to Stakeholders (see Chapter 12) discusses the future of the online annual report and the information content that company websites should contain. It also considers how companies could make better use of existing and emerging technologies to enhance corporate communications as they shift to a new paradigm — real-time online reporting. Currently, the CICA is undertaking research to promote effective communication by "Using the Internet in Corporate Reporting." The booklet "Practical Guidance for Managing Websites" is available as a discussion draft on the CICA website.

Integrated Reporting - Preparing a Summary Annual Report

Regulatory and standard-setting bodies are constantly “improving” the rules to protect the interests of investors and to make sure they have good information for decision making. As a result, disclosure requirements increase and information disclosures become more complex. One way to address complexity and information overload is to prepare a summary annual report. For an excellent example, read the PotashCorp 2009 Summary Accountability Report and view the PotashCorp 2009 Online Annual Report and PotashCorp 2009 Online Sustainability Report using keywords.

Integrated Reporting - Step 1: Summary Annual Reports

The 2008 CICA research study on Corporate Reporting to Stakeholders discusses ways to enhance corporate communications (see Chapter 10). It reviews the literature on information overload, complexity in standards and regulations, and summary annual reporting (see Chapter 11). The study also surveys current practice and trends, particularly essential information disclosures to stakeholders. It then debates how summary annual reports might help resolve future challenges for integrated corporate reporting.

A Framework for Integrated Reporting to Stakeholders

In June 2008, the Canadian Institute of Chartered Accountants (CICA) published the research study Corporate Reporting to Stakeholders. The primary purpose is to promote effective communication by providing helpful guidance on how to achieve comprehensive and integrated corporate reporting. A secondary purpose is to suggest how useful information can best be communicated. With stakeholder information needs in mind, the study assesses what corporate reporting disclosures are relevant to decision-making. A review of the literature combined with a survey of current practice helped identify more than 50 different types of information, each classified by category — Corporate Overview, Corporate Social Responsibilities, Review of Operations, Financial Summary and Analysis, and Supplementary Information. They provide a framework for integrated corporate reporting to stakeholders.

International Integrated Reporting Committee

A new international committee formed by the Prince of Wales’ Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) will work to integrate the way companies report on strategy, risk, governance, financial performance and sustainability. The International Integrated Reporting Committee (IIRC) includes high-profile members such as the International Accounting Standards Board (IASB), the International Federation of Accountants (IFAC), the Big Four public accounting firms and some of the world’s largest institutional investors and governance organizations. It is the result of a decision made in December 2009 at a meeting of more than 20 organizations to form a committee that would oversee development of an integrated reporting model. (For more information, read the Press Release and visit the Integrated Reporting Committee Website.)

Integrated Reporting for a Sustainable Strategy

How can managers better identify, describe and confront the issues of environmental and social sustainability that their companies increasingly encounter? One Report suggests integrating information about financial and nonfinancial performance into a single document. According to the authors, Robert G. Eccles and Michael P. Krzus, such integration allows companies to view risks and opportunities in their strategy. It also speaks with one voice to all stakeholders, who can engage with the company using Web 2.0 tools and technologies. One Report provides a way of demonstrating and building transparency and trust. (Read the Harvard Business School article One Report: Better Strategy through Integrated Reporting.)