Strate has joined a number of international organisations, as well as four other prominent South African companies, to develop a technical framework for Integrated Reporting by 2013. It is one of over 80 organisations that are involved in the pilot phase of the International Integrated Reporting Council’s (IIRC’s) programme, which will be used by companies across the world, according to Hannes van Eeden, Strate’s Chief Financial Officer and Company Secretary.
The IIRC states that there is ‘a growing realisation that they [investors] need better quality information from businesses to enable a more efficient allocation of capital. There is also a growing body of research, which shows that greater transparency can improve a company’s access to capital’.
South Africa is in many ways a leader in corporate governance and sustainability, with Mervyn King chairing the IIRC. King is well-known for chairing the King Committee on Corporate Governance in South Africa, which published the King I, II and III Reports on Corporate Governance in the country,” says van Eeden.
Underlying the Code of Governance Principles as contained in King III are principles of accountability, integrity and transparency. The King III Code on Governance defines an integrated report as ‘a holistic and integrated representation of the company’s performance in terms of both its finance and its sustainability’.
The Pilot Programme
The programme forms part of a broader international initiative and Strate, is excited to be part of it,” says van Eeden, who adds that Strate has already published its third Integrated Report.
The Pilot Programme is the IIRC’s innovation hub, which encourages and facilitates the evolution of corporate reporting. It aims to lead to businesses adopting Integrated Reporting, supported by institutional investors, regulators and standard setters. The International Federation of Accountants (IFAC) has called for the G-20 countries to support the IIRC’s development of the Framework. Van Eeden adds:
Integrated Reporting calls for more transparent disclosure and communication with all stakeholders, evolving from the traditional reports on financial statements to holistic informative reporting, thereby supporting the needs of stakeholders, companies and regulators. Following the Global Financial Crisis, stakeholders questioned the reporting, disclosure, risk exposure and sustainability of companies going forward. Transparency and risk have become key themes throughout global markets.”
It is a global market and companies can’t operate in silos. They need to work towards a common goal to strategically address the needs of its stakeholders in a structured and transparent approach. Not only will the information required and reflected in the Integrated Report direct companies by impacting their processes, it will break down the silos and help drive efficiencies. The standardised Integrated Reporting guideline will also be developed with the aim of becoming a reliable international framework to enhance Integrated Reporting holistically,” concludes van Eeden.
On 26 September, the IIRC marked the first anniversary of the launch of its Pilot Programme by holding a major international conference, which Strate attended, and publishing a Yearbook to showcase the business and investor journey towards Integrated Reporting.