The International Accounting Standards Board and the International Integrated Reporting Council have signed an agreement to develop an integrated corporate reporting framework that includes financial, governance, management commentary and sustainability reporting.

Hans Hoogervorst (left) and Paul Druckman

The memorandum of understanding, signed by IASB chairman Hans Hoogervorst, and IIRC chief executive Paul Druckman, aims to deepen the cooperation between the two organizations and demonstrate the common interest of both organizations in improving the quality and consistency of global corporate reporting to deliver value to investors and the wider economy.

"This agreement formalizes the already strong relationship that exists at multiple levels between our respective organizations,” Hoogervorst said in a statement. “We support the IIRC’s vision of the evolution of corporate reporting, and through this agreement we will cooperate on important areas of mutual interest.”

Hoogervorst had revealed last month during a conference in New York that the IASB planned to sign the MoU with the IIRC (see IASB Plans to Support Integrated Reporting Effort). The IASB is responsible for the development and promulgation of International Financial Reporting Standards, which are required or permitted by companies in more than 100 countries.

"In 10 weeks, the IIRC will publish the draft International Integrated Reporting Framework for consultation,” said Druckman.”An important part of our work is about creating the conditions for adoption of integrated reporting as a better language for businesses to communicate with their investors, in order to deliver more sustainable value creation and more efficient capital markets. The IASB has done so much to improve the quality and consistency of financial reporting across the world. Creating a new corporate reporting language that better serves business and investors, and contributes to a more sustainable global economy will be the ultimate prize.”

The IIRC is a global coalition of market participants and other relevant stakeholders who are working towards the publication of the International Integrated Reporting Framework.  The consultation draft of the framework is due to be released on April 16, 2013. The framework itself will be published in December 2013. The IIRC’s mission is to create a globally accepted International Framework that elicits from organizations material information about their strategy, governance, performance and prospects in a clear, concise and comparable format. The International Framework will underpin and accelerate the evolution of corporate reporting, reflecting developments in financial, governance, management commentary and sustainability reporting. The IIRC hopes to seek to secure the adoption of by report preparers and gain the recognition of standard setters and investors.

A number of firms have been involved in developing the framework, including PricewaterhouseCoopers, including PwC chairman Dennis Nally. “PwC has been active as a global network in integrated reporting so we already have a lot of perspectives out in the market about that,” said Kayla Gillan, who is leading PwC’s new Investors’ Resource Institute after serving as deputy chief of staff at the Securities and Exchange Commission and as one of the founding members of the Public Company Accounting Oversight Board. “We also do a lot of work in the sustainability space,” she added in an interview Wednesday. “PwC has been very active on the IIRC, and Dennis Nally has a role on that council.”