New year, new start. Perhaps this year your company needs to implement Integrated Reporting, or it’s a change you’ve been thinking of making for a while. Like so many resolutions the most daunting thing is figuring out where to start. Below are five steps to get you going on the right path.
- Put together your team. A good report depends on having the right team in place to manage it. Where integrated reporting often falls down is that it is given to the same team who were responsible for the annual report and they are expected to adapt to this step change. This, however, is a new type of reporting and it requires a new type of team. While it’s important to include people who have experience of managing reports it is equally as important to diversify. In my experience, companies that find the transition easier tend to have an integrated team that includes members of finance, sustainability, communications, investor relations, human resources, strategy, and risk departments.
- Know your audience. The first rule of writing is to understand your audience and integrated reporting is no different. In line with the Framework, the report should be aimed at providers of financial capital, but this means something different to different organisations. Who are your providers of capital? For some businesses this is as simple as shareholders, but you might want to consider if those shareholders include, for example, employees through share schemes or the average person through a pension fund. On the other hand, state-owned companies might view this as anyone who pays tax or NGOs might want to speak to those who donate. Once you’ve come to grips with who you’re talking to you can begin putting together a report that speaks to the concerns of this group.
- Figure out your story. Historically, reporting could be a tick-box exercise. Integrated Reporting shouldn’t be. While the Framework is there to guide you it is crucial that your company decides what its story is and how best to tell it. This can be done in a number of ways, including a materiality workshop; using external reviews, such as environment and media; utilising the risk function; and engagement with employees and stakeholders. All stories need to have a beginning, a middle and an end, so yours should encompass the company’s past, what is most important to it now and where it plans to go. And remember, avoid clichés and business jargon – this is your company’s story, if you use the same phrases and descriptions as all your peers nothing will set you apart.
- Plot your process. An in-depth schedule is one of the best ways to anchor the integrated reporting process. Having a bigger team, and needing input from various departments, makes it crucial that you know what needs to happen, by when, and who is accountable for what. Planning also makes the change less overwhelming for your team because they understand their responsibilities and the timelines allow them to manage what they can, rather than thinking they need to deliver the perfect integrated report on their first draft.
- Get board buy–in. This sounds obvious – you wouldn’t be undergoing this change in reporting if the board didn’t support it. However, having board buy-in is about more than just getting board and management to agree to integrated reporting – it’s also about them understanding what their role in the process is. For an integrated report to be successful you need board and management to really engage with it, at various points along the process. Ultimately, the board signs off on the report and they need to understand this responsibility upfront and support your team in making this change.
Remember that this is a new process and it brings new challenges. In particular, it takes time to figure out your story and even more time to ensure you implement it properly; people need to work together and the report needs constant refining so it doesn’t become long and complicated. You won’t perfect integrated reporting in one year, and it may take three or more years, but the process is bound to give you a fresh perspective on your company and add value, now and in the future.