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December 19, 2012

Integrating the world

For the past six weeks I embarked on a journey, quite literally, around the world with one of the key areas of focus being to debate and disseminate how businesses are beginning to embrace Integrated Reporting <IR>. It was interesting, informative and exhausting, but above all it proved that Integrated Reporting is a global movement. I am more convinced than ever that it is not about whether, but when, <IR> is accepted. Say it quietly, but <IR> is becoming inevitable.

My first stop was the vivid and vibrant Hong Kong. I spoke at a major conference and attended a companies workshop on Integrated Reporting. With regulators and stock exchanges taking the floor with me, we discussed the focus on <IR> being about value creation and this was something the Hong Kong community easily grasped. I found that there is an innate sense of integrated thinking already in Hong Kong and companies such as SWIRE Group and MTR, who were on my panel, demonstrated that integrated thinking is an integral part of the their businesses, helping to drive their strategy and business model. This is undoubtedly a backbone that will make their move towards Integrated Reporting more straight forward.

Then onto Japan, a country that has been in recession for 20 years now, and where there is a growing momentum around the need for fundamental change. As an island with a topography and vulnerability to natural disasters such as the recent earthquakes and tsunamis, the idea of incorporating the broad capitals into a business strategy is more obvious than for many other places. The feeling that there must be a focus on resilience is more accepted. I was told that there are 4,000 companies in the world that are more than 200 years old and that more than half of these are Japanese. Reverting back to the traditional Japanese corporate culture of long termism, rather than the current short-focused trend, was so much more in evidence than in my trips in recent times. I was delighted to hear Mr Sato, Chairman of Japan’s Corporate Finance Executive Committee, say "We truly share the ultimate objective that the Integrated Reporting initiative is pursuing ……. Japan needs to reapply the principles of long-termism that I remember from when I started my business 40 years ago."

My next stop was Australia, where there are many innovative leaders in the <IR> movement who understand and appreciate the need for change in corporate reporting. Due to two recent high profile cases, there is almost a fixation currently to mitigate director liability. This led to me fielding questions about ideas put forward in the Framework about strategy and direction coming directly from the Board. However during debates and discussions it is obvious to all that there is a way through this and that Australia will continue be a leading innovator and strong advocate of <IR>.

My final stop was New York for the UN Global Compact Lead Symposium. The Lead initiative has as a central theme enhancing corporate reporting through <IR>. Finding myself in NASDAQ’s offices, in the hub of Times Square, was the icing on the cake at the end of my whirlwind world tour. I was delighted to take a back seat and let the number of IIRC Pilot Programme businesses that were present lead the conversation as the main advocates of <IR>.

I have come to realise that however passionate and convinced I am that <IR> is part of the solution, not more of the problem, what holds more resonance is hearing from the real benefactors and leaders in <IR> – the businesses that have embarked on this journey and begun to feel its benefits. These Pilot companies, by detailing how useful <IR> as a tool is for them, provided so powerful an argument that it meant I had little to add.

So I will keep in mind as the IIRC prepares to send me around the world in 2013, that if I ensure businesses and investors are by my side – I can relax and enjoy the sights just a little bit more, leaving them to spread the power of <IR>.

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