Financial Sustainability Integrated Reporting: Importance, Relationship, And Concepts

Corporate governance

Discuss about the Financial Sustainability Integrated Reporting.

Corporate governance is crucial for every organization. In the given case, corporate governance has been analyzed. Ms Serrah was interested to do a course in integrated reporting but due to some issues, she has moved on and didn’t appear in the course. Now in this case, she has shown her willingness to know more about integrated reporting and corporate governance. In this report, the main study has been done over the integrated reporting. The origin of integrated origin is in corporate governance. It assists the organization in enhancing the ability of the company in managing the value of the organization in short term, medium term and long term.

The corporate governance is an internal system which contains the process, procedure, people and various strategies that serve the needs and requirements of the stakeholders as well as shareholders by managing, directing and controlling the activities by the top level management of the company along with savvy, integrity and objectivity of the company. The main goal of this report is to analyze and explain the importance, relationship and concepts of the integrated reporting. Further, various other concept of the integrated reporting has also been analyzed to enlighten the concept of integrated reporting for Ms Serrah.

Corporate governance, corporate reporting, responsibility and integrated reporting are the significant terms which have been used in an international business to manage the business. The main motive behind enhancing these terms is the financial crisis and the various problems in the market. The enhancement incidence behind integrated reporting is of accounting scandals and environmental disaster (Eccles & Krzus, 2010). Further, business concepts are quite complex and thus it is required for the businesses to manage and maintain the corporate reporting. The concept of corporate reporting makes it simple for the business to enlarge the business.

Earlier, the financial reporting used to be enough for the international business to manage and analyze the performance and the position in the market. But now the market has been complex and with the complexity, various problems have also been enhanced in the market (Jensen & Berg, 2012). So, the concept of integrated reporting would be useful for the company to manage all the complexity and the problems in the organization.

Firstly, the concept of integrated reporting depict that the performance of an international company bases over various financial and non-financial factors. For analyzing the better performance of the company, it becomes important for the management of the company to relate all these aspects and the variables with the help of the integrated reporting to make a better study and decision (Frias?Aceituno, Rodriguez?Ariza & Garcia?Sanchez, 2013). Interpreted reporting connects governance, financial, non financial, remuneration, social, environmental and economical factors of a company. The concept of integrated reporting could also be analyzed through the definition that this concept follows the targets and strategies of the company to set the business.

Literature Review

The concept of integrated reporting could be understood more briefly through conducting a study over various articles, study and magazine. Currently, entire corporate scandals have been taken place due to corporate scandals and the insufficient control system over the business. This all has impacted the policies and corporate governance power of the company. Basically corporate governance arises because of conflicts among two parties of the company and their interest. The associated parties are managers of the company and the shareholders of the company. de Villiers, Rinaldi & Unerman, (2014) has defined that the corporate governance is n internal system which contains the process, procedure, people and various strategies that serves the needs and requirements of the stakeholders as well as shareholders by managing, directing and controlling the activities by the top level management of the company along with savvy, integrity and objectivity of the company (Adams & Simnett, 2011).

Further, various organizations and the corporate governance department of various countries have explained that the corporate governance is a set of companionship among the management of the company, board of directors, shareholders of the company and the stakeholders of the company. Further, Eccles & Saltzman, (2011) has explained in his study that corporate governance explains the various significant issues which manages and integrates the social, economical and environmental values and the business operations of the company.

According to the Flower (2015), it is required for every organization to manage and maintain the position of the corporate governance in an organization. Corporate governance must be disclosed by the every organization on the aspect of politics, risk, social values, stakeholder’s perspective etc. to manage the diversity in the organization. Corporate governance is a critical aspect of an organization. Nowadays, the principle of integrated reporting has been more complex with the increased diversity and competition in the market. Current changes into the corporate governance and integrated reporting have been driven changes into the global level (Abeysekera, 2013).

Currently corporate governance has been managed and arose by the companies to reduce the level of complexity. Ruggie (2011) has depicted in a study depict the corporate governance is a sign of modern technology and changes in an organization. More, Admas (2015), has briefed in his study that corporate governance explains the various significant issues which manages and integrates the social, economical and environmental values and the business operations of the company.

Integrated reporting is suitable for a company for a short term, long term and medium term for a business. It assists the company to manage and administer the various policies and the complexity in the operations of a business (Cheng et al, 2014). Integrated reporting explains about the information of an organization in context of financial and non financial term. It also expresses about the performance, strategy, prospects and governance which reflects the commercial, social and environmental context in which the corporate governance performs. This concept offers the concise and clear picture about the organization. This concept creates and enhances the value of the company in future (Suter, Oelke, Adair & Armitage, 2009).

An international committee has also been set by the international organization community. This organizational committee evaluates the corporate governance and integrated reporting of an organization and takes further steps accordingly. More, the concept of integrated reporting depict that the performance of an international company bases over various financial and non-financial factors (Cheng et al, 2014). For analyzing the better performance of the company, it becomes important for the management of the company to relate all these aspects and the variables with the help of the integrated reporting to make a better study and decision (Busco, 2014).

According to the Admas (2015), it is required for every organization to manage and maintain the position of the corporate governance in an organization. Current changes into the corporate governance and integrated reporting have been driven changes into the global level. Interpreted reporting connects governance, financial, non financial, remuneration, social, environmental and economical factors of a company (de Villiers, Rinaldi & Unerman, 2014). The concept of integrated reporting could also be analyzed through the definition that this concept follows the targets and strategies of the company to set the business.

Further, it has been explained by Dumitru, Glavan, Gorgan & Dumitru, 2013) that Corporate governance, corporate reporting, responsibility and integrated reporting are the significant terms which have been used in an international business to manage the business. Moreover, a study of Azapagic, (2003) express that the main motive behind enhancing Corporate governance and responsibility and integrated reporting are the financial crisis and the various problems in the market. Further, it has been added by Daub (2007) that the enhancement incidence behind integrated reporting is of accounting scandals and environmental disaster. Further, business concepts are quite complex and thus it is required for the businesses to manage and maintain the corporate reporting (Schaltegger & Wagner, 2006). The concept of corporate reporting makes it simple for the business to enlarge the business.

Jensen & Berg, (2012) has depicted into his study that in ancient times, financial reporting was quite enough for the companies which are performing their business in the international market, to manage and analyze the performance and the position in the market. But now the market has been complex and with the complexity, various problems have also been enhanced in the market. Further, as a conclusive study, it has been expressed by OECD (2017) that the concept of integrated reporting would be useful for the company to manage all the complexity and the problems in the organization.

Further, according to the study of Burritt, Hahn & Schaltegger, (2002), it has been found that the integrated reporting is a process which has been founded by the organization on the perspective of integrated thinking that outcomes in a periodic report of integrated system by a company about the creation of value over time, communication and other related factors. More, it has also been defined that the integrated reporting is an integrated representation and holistic of the company’s performance in terms of responsibility as well as sustainability and finance of the company.

Because, nowadays many companies, governments and the stakeholders have already known the significance of social, environmental, governance information as a huge part of annual report which is needed by the organization. Integrated reporting is the main part which offers stakeholders, government and the management of the company about the full picture of structured around, performance and business model, strategic objective of organization which includes financial and non financial information of the company. According to the Schaltegger & Wagner, (2006), an integrated reporting is the summary of communication about the governance, strategy, policy, prospects, performance in concern of external environment of the company to lead the value creation in short term, long term and medium term of the business.

In different words, the concept of integrated reporting is a significant document which communicates with the companies, governments and the stakeholders about the current position of the company and the governance, strategy, policy, prospects, performance of the company. This report expresses the stakeholders about the value creation story of the organization and policies in an understandable manner. Thus, the reports of integrated reporting depict about the activities, risks, abilities and opportunities of the company which has been grabbed by the company or could be grabbed by the company in near future (Enquist, Johnson & Skålén, 2006).

It has been suggested that the main documents of the company and its communication level is integrated reporting. It has been suggested that the most significant factors and guiding principles which refers to the information which is not correct. Following are some of the elements of the corporate governance:

Business model and organizational overview:

This system assists the organization to analyze that how the sustainable value could be created in long, short and medium term?

Including risk, operating context and opportunities:

This system assists the organization to analyze that what could be the associated risk, opportunities and the operating context of the company in order to manage and enhance the operations and the performance of the company? (IIRC, 2013)

Strategy and strategic objective to achieve the objectives:

This system assists the organization to analyze that what are the objectives and what could be the strategies to achieve that goals of the company in order to manage and enhance the operations and the performance of the company?

Future outlook:

This system assists the organization to analyze that what are the opportunities, strategies, threats, challenges, uncertainties and other aspects of the company in order to manage and enhance the performance of the company?

Performance:

This system assists the organization to analyze that what could be the factors in an organization which could enhance the performance of a company? (O’Donovan. 2003).

Governance and remuneration:

This system assists the organization to analyze about various policies and governance structure of an organization in order to manage and enhance the operations and the performance of the company?

The above details depict that various concepts, performance, position, Performa, profitability position etc of the company which focuses over the demands and the corporate governance of the company. It enhances the organization to maintain and manage the full picture of structured around, performance and business model, strategic objective of organization which includes financial and non financial information of the company.

The companies want to make sustainable values in order to enhance the financial values and non financial values of the company which is required by the business to manage the values for stakeholders and for the society to present and offer information to the stakeholders (IIRC, 2013). Corporate governance is a part of the integrated reports of the company which is developed by the organization in order to manage and rebuild the faith of the stakeholders and to manage the feelings of interest of managers in line with owner’s interest. Basically, the most important principles of the corporate governance are:

Fairness

Responsibility

Transparency

Accountability

The above factors depict that corporate governance mainly stand up over fairness, transparency, accountability and fairness of the corporation. Accountability is a principle which emphasize over the responsibility of the business and its impact over the environment. Further, it has been found that following are some of the guiding principles of corporate governance:

Future orientation

Connectivity of information

Strategic focus

Stakeholder and responsiveness inclusiveness

Reliability

Materiality

Conciseness (IIRC, 2011)

The research methodology which has been used to describe the companionship corporate governance and integrated reporting are empirical analysis of the content and structure of published reports of various public companies. Integrated reporting is suitable for a company for a short term, long term and medium term for a business. It assists the company to manage and administer the various policies and the complexity in the operations of a business.

The corporate governance is an internal system which contains the process, procedure, people and various strategies that serve the needs and requirements of the stakeholders as well as shareholders by managing, directing and controlling the activities by the top level management of the company along with savvy, integrity and objectivity of the company. Following is the relationship structure of integrated reporting ad corporate governance:(O’Donovan. 2003)

Firstly, the concept of integrates reporting is lied over the integrated reporting and thinking which promotes the internal process for understand the interest and needs of different stakeholders/ investors. The organizations which assist the integrated documents for reporting are quite good to communicate the global performance of the company. Further, it also connects the financial information and non financial information of a company which includes those factors which focuses towards the future, embedded in integrated reporting could enhance corporate governance (OECD, 2017).

Further, it has been explained by Admas (2015) that Corporate governance, corporate reporting, responsibility and integrated reporting are the significant terms which have been used in an international business to manage the business. Moreover, a study of Daub (2007) express that the main motive behind enhancing Corporate governance and responsibility and integrated reporting are the financial crisis and the various problems in the market. Further, it has been added by Azapagic, (2003) that the enhancement incidence behind integrated reporting is of accounting scandals and environmental disaster. Further, business concepts are quite complex and thus it is required for the businesses to manage and maintain the corporate reporting. The concept of corporate reporting makes it simple for the business to enlarge the business.

Further, it has also been analyzed that the main focuses of the company is in integrated reporting as integrated reporting is the main part which offers stakeholders, government and the management of the company about the full picture of structured around, performance and business model, strategic objective of organization which includes financial and non financial information of the company. According to the Eccles, Krzus, Rogers & Serafeim, (2012), an integrated reporting is the summary of communication about the governance, strategy, policy, prospects, performance in concern of external environment of the company to lead the value creation in short term, long term and medium term of the business.

Further, it has been found through the study of Busco (2014) that in ancient times, financial reporting was quite enough for the companies which are performing their business in the international market, to manage and analyze the performance and the position in the market. But now the market has been complex and with the complexity, various problems have also been enhanced in the market (Cheng et al, 2014). It assists the company to manage and administer the various policies and the complexity in the operations of a business.

Conclusion:

Through the above study, it has been found that the various changes have taken place into the position of corporate governance. Because, nowadays many companies, governments and the stakeholders have already known the significance of social, environmental, governance information as a huge part of annual report which is needed by the organization. Integrated reporting and corporate governance  is the main part which offers stakeholders, government and the management of the company about the full picture of structured around, performance and business model, strategic objective of organization which includes financial and non financial information of the company. An integrated reporting is the summary of communication about the governance, strategy, policy, prospects, performance in concern of external environment of the company to lead the value creation in short term, long term and medium term of the business.

In ancient times, financial reporting was quite enough for the companies which are performing their business in the international market, to manage and analyze the performance and the position in the market. But now the market has been complex and with the complexity, various problems have also been enhanced in the market. It assists the company to manage and administer the various policies and the complexity in the operations of a business. The origin of integrated origin is in corporate governance. It assists the organization in enhancing the ability of the company in managing the value of the organization in short term, medium term and long term.

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