A snapshot from the Integrated Reporting frontline: 30 days in the life of an IIRC Relationship Manager

This September has been a great month for spreading the <IR> message across a number of very different yet receptive markets. As IIRC’s travelling salesman I can report that besides eating copious amounts of yummy Ukrainian pancakes, sweetest Turkish baklava and wholesome Swedish meatballs I met with many interested stakeholders to discuss ways to sow  <IR> seeds in the minds of opinion shapers and decision makers.

First up: Ukraine. The economic and political situation continues to be rather unstable and fluid resulting in many companies’ reluctance to engage let alone invest in new initiatives including <IR>. Due to historical reasons the majority of Ukrainian companies still tend to look for guidance from the government rather than showing initiative on matters including adopting best industry practice in corporate reporting and governance. The government has carefully nailed its colours to the mast declaring its intention to join the EU and to adopt the necessary guidelines and policies to enable membership but without a firm timetable.

Meeting a number of companies across several sectors the most positive response came from banks and financial sector representatives. Pioneering IFRS implementation and realising the importance of bringing together financial and non-financial risks the banking sector seems miles ahead of its peers. Being a keynote speaker at the first Ukrainian financial forum dedicated to <IR> in Sevastopol I had an opportunity to share the IIRC’s vision and discuss challenges and opportunities with key stakeholders including the Central Bank, accounting and audit bodies as well as interested financial institutions. This fruitful exchange led to strong interest by a number of banks to join the IIRC family including the prominent Aktiv Bank. <IR> in Ukraine remains firmly a work in progress with much awareness raising and convincing to do.

Turkey calling. My visit to the beautiful city of Istanbul was marked by two contrasting emotions. The majority of IIRC partners were picking up the broken pieces of their 2020 Olympic dreams while at the same time being energised by the ongoing demonstrations in Taksim Square covering progressive issues including environmental protection and greater government accountability. I could not help but notice the positive energy the latter event brought to my stakeholder discussions about the role of <IR> in Turkey. If <IR> is indeed at the cutting edge of corporate reporting it showed in the positive reception by the Istanbul Stock Exchange, Capital Markets Board and a number of prominent companies eager to learn more about the viability of <IR>. Turkey’s biggest bank, Garanti Bank, recently became an IIRC Business Network participant, which clearly spurred stakeholder interest. Government plays a key role in the potential adoption of <IR> necessitating a robust targeting strategy including the Ministry of Finance together with our Turkish partners Corporate Governance Association of Turkey and our newly appointed IIRC Ambassador Professor Vedat Akgiray. There are clear political obstacles in the way of <IR> implementation including the issues of greater transparency and lack of non-financial risk assessment.

With the G-20 coming to Istanbul in 2015 the aim is to recruit more prominent Turkish Business and Investor Network partners reflecting the deepening footprint of this emerging economic and political powerhouse. Walking through Istanbul’s famous Grand Bazar I am engulfed by a thousand enticing smells and bustling people going about their business. It reminds me of the diversity, warmth and genuine interest I have experienced during my stay. This bodes well for <IR> taking deeper root in the months and years to come.

Final stop: Sweden. Not only does Sweden feature prominently when surveys examine quality of life and wellbeing indicators but it also hosts some of the most progressive and well run companies in the world from ABB to IIRC Pilot Programme Business Network participant Volvo. The Swedish Ministry for Foreign Affairs even employs a CSR Ambassador advocating and monitoring business practices including the quality of business reporting of Swedish companies home and abroad.

No wonder I found many open doors when visiting Stockholm. Ericsson and Tele2 were just two of the companies visited looking to take the next step in their reporting efforts. Oh the joy of diving straight into the <IR> details without having to explain concepts like sustainability and the business case for more holistic yet smarter reporting. If my visit is anything to go by then Swedish companies “just get it” and want to “get on with it”.

In contrast IIRC partners EY and BDO provided useful intelligence on the state of corporate reporting and their assessment was far more balanced. Issues raised included the need to make <IR> relevant for SMEs and private companies as they form the backbone of the Swedish economy. Furthermore existing reporting initiatives e.g. the mandatory GRI reporting for state owned companies are not spreading significantly across the business community and most sustainability efforts were described as “skin deep” and led by consultants contrary to being embedded in the corporate DNA. These views reminded me of the formidable Swedish warship Vasa which sank in 1628 only 1300 metres into its maiden voyage due to its top-heavy construction, and in particular, insufficient ballast. A key feature of <IR>, in my view, is to provide “reporting ballast” so that report readers are aware of the future direction of travel, resource allocation and any anticipated risks and opportunities.

So if the pessimist sees the <IR> glass as half empty and the optimist claims it is half full then this month has taught me that the glass is too small to hold the promise of a more meaningful corporate report. So we try harder and engage with more stakeholders in the quest to see the <IR> mature and become accepted from Argentina to Zambia.