Contextual reporting connects the Integrated Report to company data

1 September 2015

It used to be that the only information available on a company was the information made available by the company. Typically, this information was delivered in the form of an annual report. Although annual reports got larger and weightier, today they are no longer the only source of information about a company, according to Fronesys partner Jyoti Banerjee.

Instead, we get our information from a variety of sources.  Data terminals provide information on market prices, news about a company and its competitors, comparison metrics between companies from the same industry or region, and messages from a company about its own strategies and actions. More online research will uncover information about environmental performance and social impacts, some of which might not be tracked by the company itself.  The list goes on and on.

While the existing information about a business is multiplying, the challenge for annual report writers is to make the information they provide both accessible and relevant. In fact, one of the principles captured in the International <IR> Framework is to be concise.  Is it possible for companies to be more transparent about their operations and meet growing disclosure requirements while providing smaller reports than before?

The problem of the two-way traverse

The integrated report is the home of information about company strategy and the business model, whilst ensuring that all the information that is included is material to the organization’s value creation story. But it also needs to have connectivity to further information which gives greater insight on specific issues. When you consider the extra-company sources of information also made available then we can see a picture with an emergent problem.  And the problem is this: the information and data sets that supplement that which is found in an integrated report lacks context about a company’s strategy, or business model, or risks, or opportunities – the sort of information contained in the integrated report.

When we read an integrated report, we should be able to find the underlying data that gives us insight on a company’s strategy and its business model. Conversely, when we delve into large sets of corporate data, we should be able to understand how material that information is to the risks and opportunities facing the company. This two-way traverse between an integrated report and other pieces of corporate data is what I have named ‘contextual reporting’, a concept adopted by Bob Eccles and Mike Krzus in their new book, The Integrated Reporting Movement.

To get contextual reporting to work, we need to see some key ideas to develop. First, we need technology in place to enable greater connectivity between the information in digital reporting with other corporate information. Secondly, we need better methods to be able to gain analytical insights from the vast troves of structured and unstructured data that is increasingly available to the information consumer. Finally, we need standards in place to govern the publication of electronic reporting information.  If we can see this happen, it will be more likely that the integrated report will become a rich contextual map that can guide internal and external users through the mazy terrain of corporate information.


Assessing the impacts and outcomes of integrated reporting

Fronesys founders played influential roles in the development of the integrated reporting movement, a corporate reporting mechanism that now has around two thousand listed companies as its adopters, and which is now part of the mainstream of corporate reporting. So, perhaps, now is as good a time as any for Jyoti Banerjee to look back and assess the outcomes and impacts, as well as the what-might-have-beens, of this new form of corporate reporting.

Integrated thinking is focus of chapter in new Oxford handbook

Oxford University Press has just released a new chapter from the forthcoming Oxford Handbook of Food, Water and Society: Integrating Multi-Capital Thinking in Business Decisions. The new chapter, contributed by Fronesys partner Jyoti Banerjee, explores how we need to change our understanding of value. Here is Jyoti’s account of what you can expect in this new publication.

A Shift in Perspective – How Universities Create Value

Jyoti Banerjee, partner at Fronesys, highlights that by adopting the principles of integrated thinking and reporting, universities can move away from a focus on reporting short term financial metrics to a multi-stakeholder approach which offers compelling narratives about their value.


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