The IIRC and its dialogue with business organizations
On 12th and 13th October in Amsterdam the 2017 IIRC Convention took place. We were present at this event.
The IIRC is the worldwide council addressed at the study and deepening of the integrated report. Particularly, the integrated report represents the privileged instrument for value creation. The aim of IIRC is to make the integrated report become a global rule for all the business companies: for this reason, it started with them a dialogue in order to enhance coherence, substance and consistency of the integrated reporting with attention to the shared standards and information.
The Integrated Report
The integrated report communicates relevant information about business companies. It reports them directly to companies stakeholders with precision and transparency. Particularly, it involves corporate strategy, performances and governance as well as all those information addressed to value creation. For writing an integrated report, effective relationships between operational units and corporate functions is necessary.
Integrated Report Evolution
Richard Howitt, IIRC CEO, has affirmed the worldwide evolutionary process of integrated report is taking place in a relevant way: it becomes an instrument of reference for a sustainable financial system. It offers the possibility to be used such as an “umbrella” for the organizations. In fact, it allows important connections among all the different reports of the business company. The corporate evolution is then addressed to the growing diffusion of the business practice of writing the integrated report. When the culture of integrated report will be finally mature, it will become the rule and the model of the future reporting system.
The corporate creation of value is highlighted by the integrated report which is strictly connected to an innovative economic vision giving value to intangibles. Nowadays the value of technological enterprises – the most rated in stock exchanges – depends on the intangibles.
Economic crisis emphasized the fact that a capitalism uniquely capable to bring wealth is not sufficient to guarantee well-being to people: on the contrary, inclusiveness as a shared value by the worldwide society is essential. Inclusiveness becomes then necessary for the social survival and people feel they are part of the market as a consequence.
The market value of a business company depends on the intangibles
Thus Stefano Zamboni, Corporate Economy Professor at the University of Ferrara, affirms: today what we call business company growingly involves the highest intensity of intangible capital, namely corporate intangibles elements. These are all the intangible resources capable to cause a positive or negative effect on the value of the organization in the short, medium and long terms. They have strategic effects for the business company and the financial value (these ones are strictly connected).
The debate on the intangibles introduces a new concept of capital: an available capital to be used for value creation.
The intellectual capital, that is organizational, relational and human, represents one of the pilasters of the intangible capital: this one originates the corporate strategy, governance, performances and perspective together with also financial and sustainable capital. Corporate sustainability is realized with knowledge and intellectual capital, the natural and social capital and the business model. These three are the necessary elements for corporate sustainability.
For a sustainable future
Furthermore, with the integrated report business companies are more aware of their social role: particularly, it communicates this role giving value and highlighting the hidden capitals in many business organizations.
With integrated report and the consideration of corporate intangible values, business companies communicate and also develop an awareness of their connection with their territory and their positive effects on society at community level. Finally, business companies have a determined social role.
Value creation is then in reference to a clear vision and actions to change the world in a better way. A world where clients and stakeholders are people. Where nature, man and territory are in mutual harmony.
Sign up for our newsletter to stay up to date on our news.