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Integrated Reporting for Small- and Medium-Sized Entities in Africa, SAIPA
The document discusses integrated reporting for small and medium enterprises (SMEs) in Africa, highlighting South Africa's leadership in this area through initiatives such as King III and the Johannesburg Stock Exchange's requirements. It outlines the significance of integrated reporting in enhancing business strategies, risk management, and stakeholder engagement, emphasizing its relevance for SMEs as vital economic contributors. Additionally, it provides an SME action plan to facilitate the adoption of integrated reporting practices.
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Integrated Reporting for Small- and Medium-Sized Entities in Africa, SAIPA
- 1. Integrated Reporting forSMEs in Africa SAIPA National Conference July 11-13, 2012 Alta Prinsloo Executive Director International Federation of Accountants Page 1 | Confidential and Proprietary Information
- 2. Overview • Reporting today… and tomorrow • South Africa taking the lead • International developments • The Integrated report • Integrated reporting • Relevance to SMEs • SME action plan • SAIPA action plan • Resources Page 2 | Confidential and Proprietary Information
- 3. Reporting today… BUSINESS VALUE REPORT CONTENT strategic issues strategy & governance plans / forecasts / targets implementation plans past performance business as usual Page 3 | Confidential and Proprietary Information
- 4. Page 4 |Confidential and Proprietary Information
- 5. ... and tomorrow Thinking: Isolated Integrated Stewardship: Financial capital All forms of capital Past and future, connected, Focus: Past, financial strategic Timeframe: Short term Short, medium and long term Trust: Narrow disclosures Greater transparency Responsive to individual Adaptive: Rule bound circumstances Concise: Long and complex Concise and material Technology enabled: Paper based Technology enabled Page 5 | Confidential and Proprietary Information
- 6. South Africa takingthe lead • King III (2009) – “… we need a fundamental shift in the way companies and directors act and organise themselves” – Integrated reporting represents an important element of this “fundamental shift” – It is a significant and timely evolution in corporate reporting practice • Johannesburg Stock Exchange (JSE) Listings Requirements, effective March 1, 2010 Page 6 | Confidential and Proprietary Information
- 7. South Africa takingthe lead • Integrated Reporting Committee (May 2010) – Association for Savings & Investments South Africa – Business Unity South Africa – Institute of Directors in Southern Africa – JSE Ltd – The South African Institute of Chartered Accountants – Banking Association South Africa – Chartered Secretaries Southern Africa • Framework for Integrated Reporting and the Integrated Report – Discussion Paper (January 2011) Page 7 | Confidential and Proprietary Information
- 8. International Integrated ReportingCouncil (IIRC) Page 8 | Confidential and Proprietary Information
- 9. Companies Investors • Corporate networks – GE, Natura • Investor networks – APG – WBCSD – EDF, 100 Group – UN PRI – EFFAS – UN Global Compact – Novo Nordisk – UNEP-FI – Hermes EOS – BSR – China Light & Power – ICGN – Mercer – CERES – Nestlé, WPP – INCR – French government – Global Alliance – HSBC – Aviva Investors fund – WEF – Tata – Microsoft IGOs and Accounting • UNCTAD • CIMA, ICAEW • World Bank • PwC, E&Y, GT, Deloitte, • IFAC, ACCA KPMG, BDO Regulators, Standards • JICPA, SAICA Setters and Stock Exchanges • IASB • Tokyo Stock Exchange Civil Society, Academia • FASB • London Stock • WWF • Transparency • GRI Exchange International • WRI • CDSB • Financial Stability Board • Harvard University • A4S • IOSCO • Volans • Uni. Sao Paolo • Uni. New South Wales Page 9 | Confidential and Proprietary Information
- 10. International Integrated ReportingCouncil • Discussion Paper: Towards Integrated Reporting – Communicating Value in the 21st Century (September 2011) • On track to publish International Integrated Reporting Framework in 2013 • Pilot program Page 10 | Confidential and Proprietary Information
- 11. The integrated report… • Is not a reporting by-product • Is not an extract from the traditional annual report • Is not a combination of the AFS and sustainability report • Needs to flow from the heart of the entity • Tells the overall story of the entity • Focuses on what is relevant and material • Contains positive and negative issues and challenges • Is concise and written in clear / understandable language • Is the entity’s primary report to stakeholders Page 11 | Confidential and Proprietary Information
- 12. The integrated report… • Provides an overview of how an entity demonstrates stewardship and creates and sustains value • Brings together material information about an entity’s strategy, governance, performance, and prospects in a way that reflects its commercial, social, and environmental context Page 12 | Confidential and Proprietary Information
- 13. The integrated report– a strategic lens Page 13 | Confidential and Proprietary Information
- 14. The integrated report– guiding principles and content elements Page 14 | Confidential and Proprietary Information
- 15. Integrated reporting • Theintegrated report is a product of integrated reporting • Integrated reporting is a process • The integrated reporting process requires integrated thinking and, ultimately, integrated management Page 15 | Confidential and Proprietary Information
- 16. The integrated reportingprocess Page 16 | Confidential and Proprietary Information
- 17. Why is itrelevant to SMEs? • From small to giant entities – Microsoft – Hewlett-Packard – Google – Volkswagen Page 17 | Confidential and Proprietary Information
- 18. Why is itrelevant to SMEs? • SMEs are the growth engine of economies – They create jobs – They spur innovation – They create new products – They are essential to a competitive and effective market – They are critical for poverty reduction – They play a particularly important role in developing countries Page 18 | Confidential and Proprietary Information
- 19. An SME perspective •The principles are applicable regardless of size • SMEs are likely to have fewer silos and a greater degree of integrated thinking – Application of the principle of connectivity should be easier • Although the integrated report is primarily aimed at investors, it is of benefit to other stakeholders – Entities / individuals significantly affected by the entity’s activities, products and services – Entities / individuals whose actions affect the entity’s ability to successfully implement its strategies Page 19 | Confidential and Proprietary Information
- 20. Through integrated reporting,SMEs will … • Enhance strategies • Understand how strategy affects / is affected by environmental, social, financial, and economic issues • Enhance risk management • Explore new and innovative opportunities in their products, services, processes, and markets • Improve strategic decision-making • Improve performance Page 20 | Confidential and Proprietary Information
- 21. Through integrated reporting,SMEs will … • Enhance reputation among stakeholders • Gain trust from funders / lower cost of capital • Become more competitive in the market place, enhance brand value, and improve customer support • Experience lower employment costs and better employee loyalty Page 21 | Confidential and Proprietary Information
- 22. SME action plan •Integrated reporting is a journey 1. Get organized 2. Plan your integrated reporting process 3. Engage with stakeholders 4. Identify report content 5. Assess systems 6. Prepare the report 7. Hold constructive dialogues Page 22 | Confidential and Proprietary Information
- 23. SAIPA action plan • Increase awareness of integrated reporting in SMEs • Equip members to assist SMEs in the journey • Facilitate stakeholder dialogue • Develop / contribute to the development of implementation tools for SMEs Page 23 | Confidential and Proprietary Information
- 24. Resources • International IntegratedReporting Council – discussion paper and additional resources at http://www.theiirc.org/ • IFAC Sustainability Framework http://www.ifac.org/paib • Global Reporting Initiative – Support for SMEs https://www.globalreporting.org • Look at good examples for inspiration, e.g., Impahla Clothing, Beyond Business http://www.b-yond.biz/ • CICA, CIMA, AICPA SME case studies http://www.aicpa.org/InterestAreas/BusinessIndustryAndG overnment/Resources/Sustainability Page 24 | Confidential and Proprietary Information
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