Companies are a powerful force for change. The revenues of many corporations exceed the GDP of most countries, and the private sector employs the majority of the global workforce. The way companies are run has the power to shape the long-term health of our economies, our societies, and the environment.
Yet companies face structural, strategic and cultural barriers to achieving sustainable growth. Globally, the short-termism in markets pressures corporate leaders to prioritize profit over other forms of value creation. Strategic, business and operational metrics in many companies are often misaligned and driven by divergent interests. The corporate strategy process is undertaken separately from the corporate reporting process, limiting the value to both internal and external stakeholders, and distorting the resource allocation decisions made by investors and other stakeholders.
The message for change is ringing in the ears of chief executives everywhere. Check this open letter to CEOs from the CEO of one of the world’s largest investment groups:
‘…every CEO [needs to] lay out for shareholders each year a strategic framework for long-term value creation. Those charged with governance have ultimate responsibility for how the organization’s strategy, governance, performance and prospects lead to value creation over time and put annual financial results in the proper context.’ – Larry Fink, CEO, BlackRock
We believe that in the 21st century, companies and their stakeholders need the practical wisdom to understand value creation in a holistic way – unlocking better decisions to drive sustainable performance.
HOW WE WORK WITH COMPANIES & WHAT WE OFFER
Fronesys helps companies across sectors understand and embed integrated thinking in strategy, operations and communications. Our approach, which is based on theFramework from the International Integrated Reporting Council, goes beyond reporting. It equips senior leadership and key internal stakeholders with the tools and lasting skills to apply the holistic thinking and practice of the International framework across the organisation. We have deep expertise in concepts and guiding principles, global experience as facilitators, and wide-ranging technological capabilities in smart data and metrics.
“The business of business isn’t just about creating profits for shareholders — it’s also about improving the state of the world and driving stakeholder value.”
Marc Benioff, CEO, Salesforce
“For those among us that dream of leading our companies toward economic, environmental, and social sustainability, Integrated Reporting is a key part of the plan that will get us where we need to go. As we went from having a standalone sustainability strategy to creating a corporate strategy that is sustainable (a huge difference), we began presenting our financial and non-financial results in a single report. This was bold. The shift is helping us achieve several goals.”
Bill McDermott, CEO, SAP
“Integrated reporting is where an organisation explains how it is going to create value. It is a concise communication of value. It explains how a company will be a viable thriving entity in the short, medium and long term. It is not just about financial profit.”
Paul Druckman, CEO, International Integrated Reporting Council
MORE FROM INSIGHTS
The global system of corporate information is at an inflection point.
On the one hand, the landscape for corporate information is witnessing a sea change, with wide-ranging global digital trends transforming the flows of corporate information, in the way this information is produced, distributed and consumed.
On the other hand, the 20th century presumption that the annual report is the dominant life-form for the communication of corporate information looks less appropriate in the 21st century. Corporate reporting is already changing, driven by the need to move away from backward-facing reports that focus on financial activity alone and are devoid of any explanation of how organisations create (or destroy) value.
Does anybody care? What should be done about it? Jyoti Banerjee considers the options.
Fronesys has agreed to partner the International Integrated Reporting Council (IIRC) to help foster the global adoption of Integrated Reporting. To support this partnership, three members of the Fronesys team (Thomas Odenwald, Jyoti Banerjee and John Farr) will assist the IIRC team engage with businesses across the world who are interested in building integrated thinking and reporting into their business management and reporting practices.
Integrated thinking, and its close cousin Integrated Reporting, are both gaining global impetus. We asked Fronesys associate Natalya Sverjensky to unpack the virtuous cycle that drives performance. It is an increasingly mainstream view that reporting has...