The Integrated Report and the actors of the global change by Andrea Ragazzini.
The NIBR (Italian Business Reporting Network) and the Università Cattolica del Sacro Cuore in collaboration with IT (Integrated Reporting) has presented the third national convention “INTEGRATED REPORTING AND NON-FINANCIAL INFORMATION BETWEEN GOVERNANCE AND VALUE CREATION” at the Classroom Pio XI of the Università Cattolica del Sacro Cuore in Milan on Friday 23rd February 2018, from 9,15 am till 4,50 pm.
The diffusion of the Integrated Report and the Involved Actors
As a system of non-financial accounting, the Integrated Report is experiencing a crucial moment in its evolution, which is relevant in relation to both its concrete applications in the worldwide economic communities and to its regulation and interpretation at an international level. The event organized by NIBR has represented a natural continuation of the activity of studies and research started in 2012 about these themes and has increased intensely the general attention of the national and international regulatory institutions as well as the banking and insurance institutes, the Universities, the Professional Associations, the enterprises and the small and medium-sized companies, the economic and non-economic organizations to this phenomenon, also emphasizing its importance for the development of the social and economic, national and international scenery.
The value creation in the Integrated Thinking
The Integrated Report brings the attention of business companies and investors to all the elements for the value creation in the context of organizations. In fact, as Stefano Zambon, General Administrator, NIBR; Ordinary Professor of Business Economy at the University of Ferrara; and IIRC Council member, affirms, the general theme that business companies should deal with is the concrete capability of organizations to create value for all their stakeholders in the short, medium and long term. Today the intangible resources have become fundamental for the value creation in the world of the business companies, in the light of the contemporary complex scenery of the competitive global market. Furthermore, the evolution in the business model plays a key role in the way in which business companies individuate a modality of management for the needs of their stakeholders and environmental, social and intellectual resources. In this context, the adoption of models of management and development for the corporate capitals presents some informational substantial limits, because it has a specific focalization only on the economic and financial aspects of management. According to Mr. Richard Howitt, CEO, International Integrated Reporting Council (IIRC), in this context the adoption of long-term models (rather than short-term models) is necessary. The organizations realize their evolutionary process firstly with the adoption of an Integrated Thinking in their management, that results in the initiation of a development based on the elements of value creation for all the corporate actors and, in the end, in the issue of an Integrated Report.
A cultural change
Capitalism has been experiencing the initiation of a new period focusing on the management of the intellectual and intangible capitals assets that have been made available for the community and establish a different international scenery still in development. In fact, on one hand, already at the beginning of the years 2000, in specific worldwide areas, such as the United States, increasingly more consistent rates of investment in intangible goods rather than in tangible goods have been registered, while, on the other hand, national conjunctures (such as the Italian situation) are also configured. In our country, the advent of new directions of change (such as the Legislative Decree 254) are still experiencing a crucial phase of interpretation and assimilation. The phenomenon is not only a problem of reporting, but a cultural question to be solved and implemented as a radical change in the interpretation that the economy and economic subjects have towards society and the environment in respect to the past years. For this reason, the Integrated Report is an element of sense making and corporate growth. In support to this theme, the concrete experiences of economic and non economic, national and international institutes on the theme of the Integrated Report and its legislative implementation define a clear scenery with its focus on the present and future aspects of the phenomenon. As Paolo Bacciga, Manager of the Drafting of the Corporate Accounting Files and CSR Responsible, Division Private Banking, Banca Fideuram, affirms the Integrated Report does not represent a temporary trendy business instrument for the present accounting systems, but it corresponds to the exact necessity of a corporate storytelling, activities, results and different corporate capitals of business companies. Giuseppe Zammarchi, Group Sustainability and Foundations, UniCredit Group, has emphasized that the Integrated Report expresses a modality of Being of a business company, while Massimo Romano, Head, Group Integrated Reporting & CFO Hub, Generali Group, has confirmed the strong connection of the strategy with the corporate intangible capitals and reinforced that the Integrated Report presents all the fundamental characteristics in order to become a substantial future instrument in the international scenery in the corporate accounting.
The Integrated Report and the Perspective of the Institutes of Regulation
Angelo Casò, President of the Management Committee of the Italian Institute for Accounting, has focused on the change of perspective in the corporate accounting. Traditionally, according to the users of corporate accounting and the international and national institutions of accounting, the accounting principles of some years ago represented the world of corporate informational certainty, while the non-financial and accounting information represented the world of uncertainty. In fact, this information was interesting, but not appropriate to the models of the international accounting that had been used since then. Within a few years, the change has been extremely rapid and relevant: in a short time, the necessity to understand in which directions business companies would have moved into and which strategies would have been adopted in their evolution for the users of financial data was largely diffused. Livia Gasperi, Head of Listed Companies Supervision of Borsa Italiana, confirms this trend and affirms the ineffectiveness of financial information to satisfy the answers of present investors. She has also indicated the crucial importance that the perspectives of business companies should be future-oriented, with a change in their mindset in favour of a sustainable culture. This is made of respectful behaviours towards people and the environment, of careful attention and listening to the stakeholders, in a long-term perspective. Leonardo Benvenuto, Director of Assonime, has described a positive frame in the world of Italian business companies. In fact, the ones that have adopted the Integrated Report are satisfied of their choice and are capable of positive feedbacks based on three principles: the International IIRC Framework, which is principle-based and allows an adequacy of the Report to the specific needs of every business company; the future orientation of the accounting, that allows to emphasize the ideas of the future of business companies; the model of the Integrated Report, which allows the creation of interactions with the corporate organization, with positive effects on the corporate communication.
The Integrated Report in Italy
As Massimo Romano affirms, our country is a best practice at international level for the adoption of the Integrated Report in the context of small and medium-sized companies. In fact, in Italy, the economic national structure is almost exclusively founded on economic organizations of small dimensions and the voluntary decision of their initial nucleus to elaborate the process of realization and issuing of the Integrated Report is a worldwide unique case. This happens thanks to their capability to manage and plan their financial activities in communication and connection with sustainability and this is a crucial asset for the country development. The narration of the corporate identity and story happens through the accounting of the non-financial information (that according to Massimo Romano are pre-financial, because indeed they will have effects on financial elements) but, at the same time, an evolutionary process initiates which does not involve only the corporate internal personnel, but also all the community of stakeholders around the business company as well as the society of the accounting experts.
The next step in the evolution
Today the moment for experimenting the instrument of the Integrated Report in the evolution strategy of business companies has come. As Roberto Mannozzi, President ANDAF and Central Director of Administration, Accounting and Finance of the Italian Group FS, 2018 is the starting year for the comprehension and the further in-depth analysis the instrument of the Integrated Report and for its application in the world of business companies. The economic and social world is now experiencing a turning point in its evolution and, in this view, the Integrated Report offers the possibility to all the national communities to share and to be guided by sustainable principles, in the short, medium and long term, for the well-being of territories and of all the people that are part of them.