IIRC proposes revisions to reporting framework and names new chair
The International Integrated Reporting Council has opened a 90-day consultation period on proposed revisions to its International IR Framework, and named Conor Kehoe, a former McKinsey & Co. senior partner, as its new chair.
Integrated reporting combines financial reporting with reporting on other aspects of an organization, including sustainability, governance, strategy and human capital. The IIRC sees the need for integrated reporting as more urgent than ever, with the COVID-19 pandemic spreading around the world. The IIRC is asking stakeholders to share their feedback on the consultation draft to ensure the IR Framework responds to the evolving market for more effective reporting. Feedback can be sent in through an online survey and through participation in any of the more than 20 virtual roundtables that will be hosted by the IIRC’s partners globally.
The consultation draft comes after 300 responses received by the IIRC on three topic papers it published in February, along with ongoing observation of market practice internationally, plus deliberations of the IIRC’s IR Framework Panel. A companion document that explains the basis of the proposed revisions is also available. The revision coincides with the IIRC’s tenth anniversary this year and is the first since the IR Framework was initially released in December 2013.
“The conceptual thinking and principles on which the IR Framework was founded are still as relevant as when the IIRC was formed 10 years ago,” said Erik Breen, chair of the IR Framework Panel, in a statement Tuesday. “However, insights stemming from practical use and wider market developments, as well as the simple passage of time, warrant a review for points of emphasis and clarification. We will also use this opportunity to consider what further refinement may be needed in due course. These are special times. The IR Framework Panel was unanimous in its voice to continue the revision process. If anything, the importance of integrated thinking has been further underlined by this pandemic. Urgent action is still required to better understand the dynamics of how value is created, preserved or eroded and how capital allocation and corporate behavior can better align to the wider goals of financial stability and sustainable development.”
The consultation is open until Aug. 1`9, 2020. The IIRC plans to release the revised framework in December.
The IIRC also announced its new chair, Connor Kehoe, on Tuesday. He led a McKinsey review of the corporate reporting system in 2019 and is joining the council as it steps up its work to address confusion in the reporting landscape through convergence. He is succeeding Dominic Barton, who chaired the council from 2018 to 2020 and stepped down to take up the post as Canada’s ambassador to China.
“In a world that is being reshaped by COVID-19 and is still facing the existential threat of climate change, the IIRC’s multi-capital agenda has never been more relevant,” Kehoe said in a statement. “The concepts at the heart of integrated reporting — the connectivity of information reflected in integrated thinking; the board leadership it demands; and the broadening of business models to ensure they respond to the legitimate needs and expectations of stakeholders — must become the permanent features of a new global system for reporting. The IIRC will step up its work with our partners to ensure the framework is linked to a comprehensive set of standards, interconnected oversight and assurance, that enables increased trust and confidence. I look forward to working with the IIRC team, Board and Council to drive this crucial work forward.”
AICPA president and CEO Barry Melancon, who chairs the IIRC board that oversees the council, welcomed Kehoe to his new position.
“A highly respected business leader internationally, Conor brings with him the skills we need to prepare for the next 10 years — a decade in which we aim to complete our mission,” Melancon said in a statement. “We will be seeking new ways to intensify the adoption of integrated thinking and reporting internationally and will ensure our principles form the basis of a new global system reflected in regulation, market practice and assurance.”