2013 - April
Welcome Address by ICPAS President Dr Ernest Kan at the ICPAS-IIRC Roundtable on 5 April, 2013
05 Apr 2013 Category: Speeches
Mr Paul Druckman
Chief Executive Officer, International Integrated Reporting Council (IIRC)
Members of the Media
Ladies and Gentlemen
Welcome to the ICPAS-IIRC Roundtable, themed “The Future of Corporate Reporting”.
Uncertain economic conditions, increasingly globalised business operations and increased stakeholders’ demands signal an inflection point for corporate reporting. Integrated reporting, whereby a company combines comprehensive disclosure of its finances, governance, strategy and prospects as well as reflections of the commercial, environmental and social context in which it operates into an integrated report, is gradually gaining traction around the world. Many have marked it as an important trend in the continuing evolution of corporate reporting.
Not long ago, a company could deliver its product or service, publish its annual report, distribute a dividend, and be considered a model organisation.
Today, there are growing expectations that businesses do more than simply turn a profit. They must operate (and be perceived to operate) in a manner that is responsible, ethical and sustainable; that minimises negative impacts on the environment; that takes into consideration the varied needs of a spectrum of stakeholders; and that positively contributes to the communities in which they operate and the planet generally.
While few jurisdictions mandate the activities described above, evidence of voluntary participation abounds:
- The world’s largest retailer pledges to sell more locally grown produce in the U.S.
- A confectionary company yields to public pressure and removes palm oil from its products in New Zealand.
- An outdoor apparel company vows to plant five million trees in Haiti and China.
- A consumer products company pledges to “help more than one billion people improve their health and well-being over the next decade.”
Walmart’s embrace of sustainable agriculture, Cadbury’s responsiveness to customer concerns, Timberland’s reforestation initiatives, and Unilever’s “Sustainable Living Plan” are all indicative of this new corporate operating model- one that considers sustainability not just for its public relations potential, but also for its impact on the long- term success of the business.
Today’s Roundtable on “The Future of Corporate Reporting” is timely in view of the recent developments in integrated reporting. With this theme as the backdrop, our roundtable discussion will cover four key areas, namely:
- Meeting the informational needs of stakeholders;
- The future of corporate reporting;
- Role of accountancy profession; and
- Market driven versus regulatory based approach to integrated reporting
1. Meeting the Informational Needs of Stakeholders
Today, we aim to discuss the current landscape of corporate reporting and the extent to which the informational needs of stakeholders are met under the current landscape. We will hear from our panel of experts, who will share their insights on the informational gaps based on the currently available sources of information used by stakeholders for decision-making purposes and whether integrated reporting is the only way to bridge those gaps.
2. The Future of Corporate Reporting
IIRC’s report, Building the Business Case for Integrated Reporting, states that “Integrated Reporting provides an opportunity for companies to present a holistic and complete picture of the business in a clear, concise, connected and comparable manner. It is a means of presenting the material information about the organisation’s strategy, governance and performance on commercial, social and environmental issues. Integrated Reporting builds on the practice of financial reporting, and environmental, social and governance reporting. It equips companies to manage their operations, brand and reputation strategically and to manage better any risks that may compromise the long-term sustainability of the business.”
While there are clear benefits for businesses and organisations to adopt integrated reporting, some questions remain as to whether it will represent the Future of Corporate Reporting. For instance:
1) How can integrated reporting add value and in what form can it add value to stakeholders?
2) How fast will the market catch on to integrated reporting and what are integrated reporting’s main selling points that make it attractive to people who may want to catch on to it?
3) Does integrated reporting hold for smaller companies which may likely have cost considerations and require training for implementation of integrated reporting?
4) With integrated reporting, can we now do away with traditional financial reporting?
Again, we will look towards our round table of experienced panellists, who will share their thoughts on the questions raised.
3. Role of Accountancy Profession
Singapore, being one of the key capital markets, with a vision to transform itself into a global accountancy hub by 2020, has a keen eye on potential trends that would shape the future of corporate reporting.
With integrated reporting gaining traction, there is a possibility that the future of corporate reporting can be different. How then will the professional accountant’s role evolve in this future landscape? Will professional accountants continue to be well placed to play leading roles in corporate reporting? Going beyond the financial reporting aspects, would the roles of public accountants in providing assurance be expected to change with the introduction of integrated reporting?
We hope that today’s roundtable discussion can offer some preliminary views on evolving role of the accountancy profession should integrated reporting be the way forward.
4. Market Driven versus Regulatory Based Approach
As the market gradually warm up to the use of integrated reporting, questions arise as to whether integrated reporting would thrive better under a market driven or regulatory based approach. In this roundtable discussion, we hope to gather the views of our panellists, on which approach would be better in accelerating the pace of adoption of integrated reporting, and whether they feel the need for regulators to play a role in encouraging the acceptance of integrated reporting.
As the national accountancy body, ICPAS is pleased to take the lead in encouraging conversation via today’s roundtable discussion, which brings together various leaders in business and industry to share their insights on integrated reporting. Platforms like today’s roundtable support our mission to advance the accountancy profession and promote Singapore’s development as a global accountancy hub.
I am honoured to co-chair today’s panel discussion with Paul, an expert on the subject of integrated reporting and one of its keenest advocates. And it is our privilege to also have with us thought-leaders and leading accountancy professionals to share their insights on the future of corporate reporting and how companies and organisations in Singapore are warming up to integrated reporting.
Allow me to now invite Paul to deliver his keynote presentation.