By Sheralee Morland
The Integrated Reporting Committee of SA (IRC) Annual Conference 2019 on 18 July at the Johannesburg Stock Exchange (JSE) affirmed that integrated reporting is receiving ongoing focus – demonstrated by the size of the audience (220 in the room and 218 on the webinar).
In his keynote address, Professor Mervyn King, chairman of the IRC, opened the Conference by highlighting the value of collaboration as foreseen by the 17th Sustainable Development Goal. He noted the issue of the many frameworks that organisations have to comply with or adopt nowadays and the pressing need for reporting to be addressed effectively and collectively between the framework providers.
Roy Andersen and Suresh Kana provided invaluable input in the Chairmen’s panel discussion. They stressed the need for report preparers to involve the chairman early on in the process. Involvement includes agreeing on the tone of the report, material matters and key messages, having an understanding of analysts’ and stakeholders’ comments on the previous year’s report and advocating a separate Board meeting to review and approve the report and ensure that directors provide meaningful insight, review and critique.
Another suggestion provided by the two chairmen was the recommendation for organisations to get an independent person to read the report (prior to publishing) and provide a critique of what messages are being conveyed and what is credible or not. Also useful were their views on when information is regarded as competitive. Their thinking is that while a strategy is conveyed, details of how such strategy is executed can fall into the realm of sensitive and competitive information, as do margins per product allowing competitors the ability to reprice. They suggest a mature but sensible approach getting stakeholders to understand the organisation and its path ahead. The role of the Remuneration Committee was considered, with agreement that remuneration drives behaviour and the behaviour the organisation wants should be incentivised and building in enough to address the future and clawbacks if acts were committed in bad faith. The Board must have discretion.
Mark Hoffman, Tracey Davies and Henrika Ninham shared great insights on achieving balance in the integrated report. The discussion highlighted the importance of trust through transparency in reporting – a theme which came up in most of the day’s sessions. Some of the standout points on balanced reporting included:
- the need to give perspective,
- use of the report as an opportunity to provide all the facts,
- awareness of the risk of the report being bland,
- trying to surface the unknown,
- ensuring comparability by disclosing current and previous targets,
- appropriate and complete reporting on remuneration policies (executive pay vs the rest of employee pay gives cognisance to the fair and responsible principle)
- forward-looking information that demonstrates what management and the Board are thinking, including the honest reporting of risks and opportunities.
Tracey Davies emphasised climate change which, if not entirely absent, is generally poorly reported. Her call was for the JSE to publicly support such reporting as it’s an urgent global crisis.
In the Materiality session, three companies walked attendees through their different determination processes: Nedbank (Bruce Thomas), Vodacom (Sarah Chetty) and Anglo American Platinum (Adithi Rooplall). Their slides are available on this website.
In the investor perspectives session, Mark Ingham, Robert Lewenson, Nolwandle Mthombeni and Dumisani Ndlovu with host Esha Mansingh, were definite crowd pleasers with their invaluable critique of the integrated reports they rely on for insights to perform their important roles. They even went as far as to provide a view on the most useful format of a report – i.e. the pdf version so that it can be downloaded and searched to locate exactly what they’re after. Brevity of reports is essential – and this is not always their experience with some reports so long that they’re almost unusable. In short, they want reports to be succinct, holistic, granular and honest. The point was made for the need to give some credit to the users – they know where you want to bulk up or hide information.
Some real jewels of information were proffered in the “Implementing Integrated Reporting in the Public Sector” session with the Land Bank (Carolien Samson), Industrial Development Corporation (Celice Lison) and the Airports Company South Africa (Wasfie Ismail). Here organisations and preparers are more often than not faced with complexities that are not those of the private sector. This involves multiple pieces of legislation and regulation; ministerial changes and preferences; and the level of involvement. The speakers shared the highs and lows they had encountered and that a few years down the line they’re starting to benefit from their efforts. All were of the view that integrated reporting aids the level of transparency.
One left the Conference feeling better equipped with useful suggestions to apply in the next reporting period. It reaffirmed that while a good-looking report is nice to look at the key component is demonstrating that the organisation is intent on sharing its story with all of its stakeholders in a compelling account of their ‘reason for being’ now and into the future…. that’s what it’s really all about!
