The <IR> Framework has seven guiding principles. The sixth guiding principle articulates the importance of reliability and completenessin integrated reporting.
What is reliability and completeness?
Integrated reporting challenges
What the framework says
“An integrated report should include all material matters, both positive and negative, in a balanced way and without material error.”
– Is the information reliable: does it present a balanced view and is it correct?
– Is the information complete: does it provide the full picture, considering competitive advantage and the cost/benefit of matters managed within the business, and does it contain future-oriented information?
Why is this principle important?
Accurate, valid, reliable, timely, relevant and complete information is at the heart of reliable reporting and effective business practice. The reliability and completeness principle in reporting tests this.
How do I do this?
The challenge is to select and represent information without bias. It calls for moral
In a nutshell:
– Senior managers and executives must act in good faith and in the best interests of the company
– They ensure that robust internal controls are in place to stress-test and verify data or findings
– They champion independent audit, assurance and stakeholder engagement functions without seeking undue influence
– Are themselves, together with their leaders, measured by these metrics
The power of balanced reporting
An authentic, balanced report has the power to turn a difficult situation into a positive stakeholder engagement exercise. Kumba Iron Ore is an excellent example of this. In their 2016 integrated report, Kumba transparently reported on their KPIs to demonstrate how they were addressing potential risks and what opportunities lay in front of them. It helped the public and investors to see what they were doing to improve their business practices. See the example below which highlights the good, the bad and the okay of the KPIs.
Some food for thought
Pause to think of corporate governance breaches in South Africa recently. Is your leadership team bold and humble enough to publish an integrated report that is authentic and reliable?
Still not sure how to go about reporting on reliability and completeness? Get in touch with Alchemy Creative Studios: email@example.com
This is the sixth article in a series of seven relating to the <IR> Framework guiding principles. Return to our blog to read more on these principles.
For further reading, refer to this article by the Journal of Accounting and Public Policy, or this information paper published by the IRC.