What does the future hold for corporate reporting?

corporate reporting

28 September 2016

Following the announcement that Paul Druckman is to hand over the role of Chief Executive of the International Integrated Reporting Council (IIRC) to Richard Howitt, MEP later this year, he talks to Professor Carol Adams CA, a member of the ICAS Sustainability Committee, about the need for organisations to articulate their values.

Current limitations of corporate reporting

It is widely recognised that corporate reporting has become top-heavy, with too much information being provided in the standard annual report, making it difficult to access the information they need.

However, there is a shift in global markets towards greater emphasis by some investors on stewardship, rather than the existing legalistic adherence to compliance and accountability.

For example, some pension funds now place greater weighting on the risks to businesses from environmental, social and governance (ESG) factors in their investment decisions.

Therefore, the message to business is that there is a need, and an emerging demand, for quality over quantity in the annual report, with the focus on the materiality, credibility and balance of the information included.

Within the corporate reporting arena, there are a number of different players, each advocating their own approach to, or framework for, producing a meaningful, relevant and credible annual report. In response, the IIRC set up their Corporate Reporting Dialogue (CRD) to bring these different bodies together to achieve a common outcome.

Paul Druckman

What needs to change?

Integrated Reporting was introduced as a way of encouraging a change in behaviour and attitude within the capital markets system.

It advocates a longer-term approach to investment and provides a means for an organisation to articulate how it creates value in the long term.  In an integrated report, this creation of value is embedded in an organisation’s brand and people, and is manifested in the organisation’s contribution to wider society.

Although the language of integrated reporting, ie value creation in the long term, might suggest a large multi-national public interest entity, in reality, the goal for every organisation, large or small, should be to create a successful entity that behaves responsibly towards its staff, supply chain and the wider community.

So the integrated reporting model applies equally well to all organisations seeking to create value for their investors, be they external shareholders, or owner managed businesses; and for other stakeholders in wider society, be that in the creation of employment, supply chain opportunities, or community engagement.

Paul Druckman says: “Anybody who purports to be a chartered accountant, in my view, should have a good and thorough knowledge around sustainability, environmental and social areas because, otherwise, they won’t understand how they might impact.”

What is clear is that accountants working with businesses of all sizes need to consider the nature of the ESG risks to the business’ future, and provide some credibility that messages have been reported in accordance with the appropriate framework and are accurate, relevant and balanced.

For management to be in a position to make statements about how the business creates value and the risks it faces, and for us, as accountants, to be able to comment on them requires the everyone in the organisation to look towards a wider horizon and embed this approach throughout its activities.

The ability to do this is just as relevant and important for the very smallest of organisations as it is for the largest to ensure long-term success, sustainability and continued societal contribution.


Paul’s successor, Richard Howitt, MEP, was instrumental in the introduction of the EU Non-Financial Reporting Directive and has spent twenty years campaigning for increased transparency and governance in corporate reporting.

It seems clear, therefore, that the corporate reporting vision set out by Paul during his five-year tenure as CEO of the IIRC, and his campaign to encourage the capital markets to include social and environmental sustainability on their agenda, will continue in Richard’s capable hands.


  • Corporate and financial reporting
  • Sustainability

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