Integrated Reporting <IR>
Integrated reporting, or <IR>, is a philosophy that values the ability to communicate future business value over the short, medium and long term above all else. How does <IR> purport companies should do this? Through the communication of an integrated story to internal and external stakeholders that describes how all resources are contributing to the larger picture. <IR> promotes holistic, unified strategies, plans and budgets with investors and stakeholders top of mind.
According to the International Integrated Reporting Council, integrated reporting focuses on the following guiding principles:
- Strategic focus and future orientation
- Connectivity of information
- Stakeholder relationships
- Materiality
- Conciseness
- Reliability and completeness
- Consistency and comparability
It also includes eight content elements:
- Organizational overview and external environment
- Governance
- Business model
- Risks and opportunities
- Strategy and resource allocation
- Performance
- Outlook
- Basis of preparation and presentation
- General reporting guidance
When these principles and elements are fulfilled, decision making processes are placed into context with operational and financial realities, a goal which has the potential to improve the viability of the company long term. When each department’s goals are weighed against one another, well rounded decisions prevail.