Blog : BOARD TALK
|Posted on December 6, 2016 at 12:05 PM|
Better corporate governance across the globe is best achieved - as are most things, really - through collaboration.
So it is a bit surprising this is a 'first time' - but today in London the International Corporate Governance Network (ICGN) and the International Integrated Reporting Council (IIRC) are coming together for a two-day conference convening over 350 people from more than 30 markets.
It will be watched all over the world.
Together the ICGN and the IIRC are suggesting practical ways to encourage longer term thinking in the capital markets. They include a focus on strategy, performance, governance and prospects aligned to value creation over time, on investors as stewards, and on reporting.
Its importance is seen "as a key pillar of 21st century governance, leading to transparency and information disclosures which help investors to better understand companies and make better investment decisions."
You can read their joint statement here.
I did my bit for spreading the word on integrated reporting back in 2013, when I first started writing around corporate governance and leadership for Forbes. With 17,880 views at time of writing, 'If I Had More Time I Would Have Written A Shorter Letter' is still being read.
A survey of over 400 senior executives around the world launched at the conference shows that corporate reporting is seen by 93% of those surveyed as "critical to capture the value creation story."
(I hear there is a vacancy coming up in Lucy Kellaway's slot at the FT - speaking for myself I don't think it helps to talk about a 'value creation story' because you immediately muddle the issues with all sorts of interpretations overlaid on 'value creation' - but you get the picture. We could do so much better with all these messages with some better communication.)
A healthy 79%of those surveyed believe that investors want future perspective. At the start of 2016 I wrote: Institutional Investors In 2016 Seek To 'Trust, But Verify' On Governance.
What seems likely to be the most useful element of this conference on a practical level: ACCA and the IIRC will share preliminary findings of a review into 41 Business Network participants’ reports. It demonstrates that companies are using Integrated Reporting as a tool to support progressive reporting.
Out of the reports reviewed, 88% provided information on the different resources or capitals they rely on beyond the purely financial and 71% shared insights on their strategy for success.
The conference has also been a useful means for the UK watchdog on corporate governance, the Financial Reporting Council (FRC) to launch a Stewardship Code Implementation Workshop. As also reported on Forbes, the FRC is getting tough on fund managers who have signed up to that code.
“Values, behaviours and a good governance structure are central to the way an organisation achieves its objectives. By weaving these attributes into your business model, you are not just contributing to the overall success of your business, but creating an environment on which all stakeholders can depend. In that way we all create sustained growth" said Sir Win Bischoff, Chairman of the Financial Reporting Council.
Also at the conference are copies of Board Agenda, which has just launched. Someone needs to tweet a photo of the cover at me @dinamedland. Look out for my interview with Sir John Parker in 'A View From The Chair.'
This conference see a new CEO for the IIRC in Richard Howitt. “Capital markets moving towards the long term with a broader approach to value creation improves performance. The diverse international coalition which is the IIRC is committed to making this a reality. Integrated Reporting is a key vehicle for businesses and investors to have a better dialogue. It is my goal for Integrated Reporting to become a reference point for 21st century corporate governance, to create long-term value for businesses and investors together" he said.
Diary note: where did the last CEO of the IIRC go ?
Paul Druckman has been appointed to the board of the FRC with effect from 1 January 2017. He will join the Codes and Standards Committee and become Chair of the Corporate Reporting Council from the same date.
Small world, corporate governance - but big reach.