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Collaboration vital to achieve profound benefits of <IR>

Posted 29 August, 2013

Jonathan Labrey, Chief Strategy Officer at IIRC, gives us his reaction to the UK’s Financial Reporting Council’s (FRC) publication of the draft guidance on the new Strategic Report  on 15 August.

The industrialist Henry Ford said, “Coming together is a beginning; keeping together is progress; working together is success”.  The challenge for those of us actively seeking to develop new models and frameworks for business decision-making and reporting is to keep in mind these three tenets of collaboration, and work hard to achieve them.

A step in this direction took place on 15 August when the UK’s Financial Reporting Council (FRC) published draft guidance on the new Strategic Report, which will shortly become a requirement under UK company law.  The proposals should lead to a rebalancing of corporate reporting towards the communication of more strategic, relevant and decision-useful information for providers of financial capital.  The FRC is also hoping its guidance will be applied in a flexible way to encourage innovation in corporate reporting by businesses.

There are undoubted similarities between the objectives of Integrated Reporting and the UK’s Strategic Report, and the FRC’s draft guidance recognises “the similar qualitative characteristics and content” shared by both.  Public recognition of the dialogue taking place between the IIRC and national regulators is aimed at achieving a better alignment between regulatory and market-led initiatives on corporate reporting.  This is a necessary step in cementing the confidence of business and investor communities that the journey towards Integrated Reporting is worth embarking on.

We must never forsake Ford’s collaborative spirit; it is through embracing collaboration that we will unlock the true potential of Integrated Reporting – better business and investor decision-making, more productive investment and efficient capital markets.  Together, these outcomes will create profound and lasting benefits for the global economy and society.