Ian Mackintosh, chair of the Corporate Reporting Dialogue
Three authorities in corporate reporting have started working together to try to clean up differences between their reporting frameworks to create a single framework.
Tentative steps are being taken by the Global Reporting Initiative, the International Integrated Reporting Council and the Sustainability Accounting Standards Board to whittle down the differences between standards.
The three bodies are members of the Corporate Reporting Dialogue, an international forum set up more than four years ago to enable communication between organisations that set different sets of reporting requirements.
A purpose of the body, according to chairman Ian Mackintosh, is to maintain contact with each of these organisations in order to see whether they are able to eliminate differences between reporting frameworks.
The members of the body other than those already listed above are CDP, Climate Disclosure Standards Board, Financial Accounting Standards Board (observer), International Accounting Standards Board and the International Organization for Standardization.
Mackintosh, the former vice chairman of the International Accounting Standards Board, told Banking Day the forum meets three to four times a year to discuss issues of mutual interest.
One of the key projects they have had on their agenda in recent times, Mackintosh noted, is a project to align diverse frameworks. Mackintosh said the three-way discussions between the GRI, SASB and the IIRC represent a major initiative that could lead to three frameworks eliminating differences over time.
“What we ultimately want to see is one set of standards for non-financial reporting that would link to financial reporting standards. We don’t always want this to be standalone and separate,” Mackintosh explained.
“Once you have a framework and a good set of standards for non-financial reporting, the next step is to look at how that is carried on, the governance and the greater scheme of things.”
News of developments amongst the three disclosure framework creators comes as Mackintosh and the dialogue participants highlight the need for companies to look closely at disclosures they make to their shareholders and other stakeholders on the impact of the COVID-19 pandemic.
“This crisis we are in the middle of has really reaffirmed how important this type of reporting is and financial statements by themselves don’t tell the full story,” Mackintosh said.
“Looking at the resilience of companies, their preparedness, their risk planning because nobody would have predicted this eve six months ago. There’s got to be a general awareness and the integrated reporting framework is a very good high-level framework for being prepared.”
Mackintosh said companies need to be focused on ensuring they tell the story of how they are dealing with the pandemic.
“Once you are into [the pandemic] you have got to be reporting on how you deal with it and what your long term future is and where you will be going. That is the type of information you would be wanting to see in the non-financial report.”