THE INTEGRATED REPORTING INITIATIVE OVERVIEW AND UPDATE

June 2013 Presented by Mervyn E King SC

HISTORY
Great

depression Almost universal FR Business model of 19th and early 20th century Exclusive approach Mindset company apart from society

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FORESEEABILITY
Growth

of middle class Population explosion Natural assets seemed limitless Growth of companies MNEs More complex Reporting standards more complex Exacerbated by Enron, Tyco, Worldcom
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INTANGIBLES
80/20

S&P 500 Intangible assets FR did not reflect value Led to initiatives EBR, VR, TR, BBBR, CBRM At same time sustainability reports
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THE IIRC
Geneva

and St James Palace Reform of corporate reporting Knowledge lost in information Only world is a sustainable one Needs companies with sustainable strategies Investors need to make informed assessments Trustees of pension funds duty of care
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INTEGRATED REPORTING
Changed

world Intent of IR Explain in clear concise and understandable language How company creates and sustains value Short, medium and long term 6 capitals (resources) Key stakeholders Embed sustainability into long term strategy Investors can make an informed assessment
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INTEGRATED THINKING
Resources

Opportunities

Risks

Business Model

How?

Stakeholders

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AN ORGANISATIONS VALUE CREATION PROCESS

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BUSINESS MODEL
Business

model is the chosen system of inputs, business activities, outputs and outcomes which aim to create value over the short, medium and long term. Value for the purpose of IR includes all forms of value created through the increase, decrease or transformation of the capitals, each of which may ultimately impact financial return. This is a change from the traditional meaning of value which has been narrowly associated with the present value of expected future cash flows
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PROGRESS
25

full time staff, 340 voluntary workers 9 different cities and countries Sept 2011 discussion paper, prototype Draft Framework of 16 April 90 Iconic companies September 2012 30 Investor network Reform of corporate reporting urgent Important for investors and for sustainability of planet
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THANK YOU

Prof Mervyn E King SC