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Press Release

Integrated reporting, the way of the future

20 Jun 2013 5 min read

NZ businesses - well on the way to implementing integrated reporting

New Zealand businesses are well on the way to implementing integrated reporting and the Government should be looking to introduce this in New Zealand’s SOEs, says visiting Chairman of the International Integrated Reporting Council (IIRC), Professor Mervyn King QC.

Professor King recently spoke to business leaders around New Zealand about a draft global framework for integrated reporting, which he says will improve investor relationships by changing the information businesses report.

After meeting with directors and financial controllers around New Zealand, it seems a lot of businesses are already taking steps towards preparing integrated reports. They may not even know it but many of them are about 60% of the way there – the individual silos are in place and these just need to be combined into a framework. If the financial statements of listed companies were more understandable, they would be more attractive to potential investors. Capital investment is attracted to good governance and reporting,” says Professor King.

“There is a huge opportunity for SOEs in New Zealand, like Mighty River Power, Meridian and Genesis Energy, to do the same. It would make their reporting more relevant to the people of New Zealand.

“It’s become apparent that the traditional way of reporting no longer fits with stakeholder requirements. Knowledge is being lost amongst incomprehensible information. People don’t have time to read 450 page reports, let alone understand them.

“Integrated reporting ensures the most important information, including non-financial data, is included and presented in clear, understandable language. Instead of reporting on what’s gone on in the past, an integrated report looks at the present and into the future. It demonstrates how a business creates value and how it will continue to do so in the years ahead, so investors can make informed decisions in the changing world of the 21st Century.”

Peter Sherwin, Partner, Grant Thornton New Zealand, says the Government should take the lead on this as it did a decade ago when New Zealand became one of the first countries to produce a full set of financial statements under the International Financial Reporting Standards (IFRS). 

“The Government should seriously consider improving SOE reporting, to potentially raise their value for partial sale,” says Sherwin.

“The benefits of integrated reporting are already being seen in the 97 pilot companies around the world that have implemented it, including, Microsoft, Coca Cola, and in this country, New Zealand Post.

“Companies that are preparing integrated reports are finding there are more opportunities to raise capital because there’s a higher level of transparency. It’s also resulting in savings on insurance premiums as when all the risks are identified, insurers don’t have to factor in any unknowns.

“It’s great to hear New Zealand businesses are heading in the right direction and hopefully the Government will take heed of Professor King’s advice and start leading our SOEs in this direction.”

The IIRC is confident that Integrated Reporting will become the international, mainstream reporting language of the future. It is supported by global standard setters including the International Accounting Standards Board (IASB) and a significant number of global investors.

The consultation draft on the global framework for integrated reporting is available on the IIRC website and submissions on the draft close on 15 July 2013.

Further enquiries, please contact:

Peter Sherwin  
Partner, Grant Thornton New Zealand  
T +64 4 495 3777  
E Peter.Sherwin@nz.gt.com

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