IIRC appoints Dominic Barton as new chair and launches Momentum Phase
The International Integrated Reporting Council has appointed Dominic Barton, a former global managing partner at McKinsey & Company, as its new chair, succeeding longtime chairman Mervyn King.
Barton will be chairing an IIRC meeting Thursday in Paris where the organization will launch what it calls the “Momentum Phase.” The new strategic phase includes advancing integrated thinking as part of corporate governance reform, facilitating alignment in the corporate reporting system and accelerating adoption in the U.S. and China.
Barton served as global managing partner at McKinsey from 2009 to 2018 and is currently a senior partner at the consulting firm. He is expected to bring business strategy thinking, a shift to long-term investment and the future of capitalism, to drive the IIRC’s global mission to make integrated reporting more of a global norm.
“I believe that through the adoption of integrated reporting internationally we can make real changes to the way businesses and our markets as a whole function,” Barton said in a statement. “We can ensure that business is working for society, for the planet and for all stakeholders. That is why the first decision I made when stepping down from the global managing partner role at McKinsey was to join the IIRC as its Council Chair and I look forward to working with the team, as we launch this new momentum phase.”
Since 2010, integrated reporting has provided a broad-based framework combining financal reporting with reporting on other aspects of a business, such as sustainability, governance, strategy and human capital, to help companies make business and investment decisions.
Barton will take over from Professor Judge Mervyn King, who will continue to undertake global advocacy for integrated reporting as chair emeritus of the IIRC and as a world leader in the field of corporate governance.
The American Institute of CPAs is one of the groups involved in the IIRC, and AICPA president and CEO Barry Melancon is chair of the IIRC Board. “When Mervyn helped found the IIRC back in 2010 integrated reporting was just an idea,” Melancon said in a statement. “He will step down at a time when 1,600 organizations in over 65 countries are using the principles of integrated reporting to inform the way they think, act and communicate about value creation.”
IIRC CEO Richard Howitt will be working closely with Barton. “Dominic’s appointment is a sure sign of the momentum which integrated reporting continues to build across the world,” he said in a statement. “As one of the world’s leading proponents for long-termism and inclusive capitalism, I am delighted that Dominic Barton will be working with us to drive that momentum towards integrated reporting globally as chair of the IIRC Council.”
Barton and Howitt discussed the plans for the IIRC and its Momentum Phase in a YouTube video that was posted on the IIRC’s website.
Howitt told Accounting Today about the changes going on at the IIRC in an interview last week. “Professor Judge Mervyn King, our founding chair and the inspiration behind integrated reporting, has reached his term limit, so he’s finishing as the chair of the Council,” said Howitt. “He will continue as the chair emeritus and continue to undertake global advocacy for us. He is probably the leading voice for corporate governance in the world, and we need him to continue his inspirational work. But the new chair will be Dominic Barton. He’s someone who is passionate about the move to long-term investment. He’s one of the leading thinkers on business strategy in the world through his work with McKinsey over an entire career, and he’s someone who can walk into every boardroom and CEO office in the world. We think he’s going to also bring huge extra momentum to integrated reporting.”
Under Howitt and Barton’s leadership, the IIRC is now moving on to a Momentum Phase for integrated after going through its “Breakthrough Phase” (see IIRC sees breakthrough on integrated reporting). “We have had this Breakthrough Phase for integrated reporting,” said Howitt. “We had a Creation Phase, we had a Breakthrough Phase, and eventually we’re going to get to a Global Adoption Phase. But we think we’ve now reached the point where the breakthrough moments have all been reached, so we’re going to announce a new phase called the Momentum Phase. This is the point where we’ve broken through, but we now need to drive momentum. It’s not just a name. It’s an intensification of the strategy. For example, in terms of global adoption, there’s going to be actual emphasis here in the United States and in China, where we’re operationalizing this year the commitment to integrated reporting at a number of companies in China itself. Not simply those two countries, but there are very important markets where we’re going to be bring new emphasis.”
The IIRC is also bringing in more investors and fund managers to embrace integrated reporting. “In terms of the investor position, we’re now moving to a position where we’ve got many investors calling for this, and increasing evidence that they are asking for it at the investor conferences and road shows, but we’re now working with a group of 23 investors — individual fund managers — who are using integrated reports in their day-to-day investment decisions, and that will grow,” said Howitt. “So the emphasis now is not just on statements and declarations. It’s very much on integrated investment. That’s going to be an important part of the next period.”
The IIRC has major plans for integrated reporting that could even make it more of a requirement in some countries. “In terms of alignment, the new project that we’ll announce in November, it won’t be a Corporate Reporting Dialogue that’s just a dialogue,” said Howitt. “It will mean action. We’re going to see metrics being aligned, and that’s going to be very significant in the next phase. In terms of the technical program, we will complete a two-year program that will provide some guidance for the profession and all of those implementing the framework. It’s going to iron out some of the creases and give the extra help that’s needed to boost implementation. Then as far as the regulatory world is concerned, we’re not switching this from a market-driven exercise, but we’ve been seeking awareness among regulators. In the future, we want to see what we’ve seen in India and China and some other jurisdictions. We want to see regulatory endorsement, a signpost that may call for possibly in a voluntary way, possibly in a compliance way, but that they do harden the ask for integrated reporting in the regulatory world.”