• 16-APR-2013

  • SOURCE: PricewaterhouseCoopers LLP

Rallying Call Issued to Global Businesses to Join the Growing Ranks of Companies Backing Enhanced Reporting Drive

The International Integrated Reporting Council (IIRC), a global coalition of investors, companies, regulators, standard setters and the accounting profession, has opened a 90-day consultation on a framework which it is hoped will enhance corporate reporting.

The IIRC's blueprint, released for consultation today, is intended to encourage a more cohesive approach to corporate reporting with a focus on how an organisation creates value in the short, medium and long term. The aim is also to enhance accountability and stewardship, and support integrated thinking and decision-making in the wake of traditional business models becoming increasingly obsolete. Companies are being urged to make sure they present more integrated information on how their strategy and critical decisions are made to underpin a higher level of investor confidence and trust, and put them in the best possible shape for the next decade.

Evidence suggests that a poorly defined and explained business model has adverse consequences. A PwC experiment with a small group of investors showed how their valuations are influenced by a company's reporting. 80% of investors recommended 'sell' when they didn't have any quantified non-financial information, but most recommended 'buy' when presented with more integrated information.

The majority (77%) of FTSE 350 companies report on their 'business model' and just over half of those companies provide insightful detail, a PwC analysis for its Building Public Trust activities found. However, only 8 out of 100 clearly connect their business model with their strategy, risks or other areas.

Available content includes soundbites from Paul Druckman, CEO of the International Integrated Reporting Council, and Richard Sexton, Global Assurance Leader elect at PwC.