Powerful findings that encourage the long-term thinking advocated by the integrated reporting movement. Here's the abstract of this paper by Jarrad Harford of University of Washington, Ambrus Kecskes of York University - Schulich School of Business, and Sattar Mansi of Virginia Tech:

We study the effect of investor horizons on a comprehensive set of corporate decisions. We argue that monitoring by long-term investors generates decision making that maximizes shareholder value. We find that long-term investors strengthen governance and restrain managerial misbehaviors such as earnings management and financial fraud. They discourage a range of investment and financing activities but encourage payouts. Innovation increases, in quantity and quality. Shareholders benefit through higher profitability that the stock market does not fully anticipate, and lower risk.

Access the full paper

Last week, the European Accounting Association held its 41st Annual Congress in Milan.  I spoke on a panel on Integrated Reporting (see link and Symposium 2: http://www.eaacongress.org/r/symposia) with Mary Barth of Stanford University, and Richard Barker of Oxford University - we focused on the issues of the usefulness of information, including data quality and reliability within integrated reports. 

- Brad

Below is a link to an article that I recently co-authored with Jeffrey Thomson, CEO of the Institute of Management Accountants (IMA) and a member of the IIRC Council/the US IR Working Group for SF Magazine (Strategic Finance).  We focused on the use of the COSO internal control - integrated framework to build more confidence in sustainability performance information contained in corporate reports.  It is based upon a thought paper that Jeff and I also co-authored last fall with Robert Herz, former FASB chair and member of the SASB Foundation Board on the same topic.  the link to the article is here: http://sfmagazine.com/post-entry/may-2018-building-confidence-in-nonfinancial-reporting/.    

A link to the full thought paper is also embedded at the beginning of the article. Please let me know if you have any questions.  Thanks.

Brad

Investment company Parnassus provides an investor view of our movement:

Integrated reporting is also likely to improve a company’s reputation with stakeholders—shareholders, customers, employees and community members—who are concerned about social responsibility. It is particularly valuable for the investor who seeks reassurance that the company they invest in is taking a long-term view and managing future risks.

The article also showcases Clorox. Our community will be featuring Clorox in a program in the fall of 2018. 

Read the full article

The average US public company today has a life span of 30 years—annually, one in ten fails and the average five-year mortality risk is 32% and the average age of an S&P 500 company is under 20 years, down from 60 years in the 1950s—what’s going on here? Read more here.

Anglo African issued its first integrated report for the year ended 30 June 2015 and is now committed to expanding integrated thinking and reporting across its subsidiaries. Founder Sanjeev V. Manrakhan explains to ACCA how integrated reporting has influenced strategic decisions and brought important benefits.

This post on the takeaways from Day 2 of the 8 Takeaways from the second day of the Responsible Business Summit summarizes a panel on reporting:

7 It's rare that the top reporting frameworks share a platform. But the Matthew Welch of the Sustainability Accounting Standards Board, Richard Howitt of the International Integrated Reporting Council, Simon Messenger of the Carbon Disclosure Standards Board and Tim Mohin of the Global Reporting Initiative took to the stage in an effort to dispel confusion about the alphabet soup of standards now crowding the reporting landscape

The post also shares an update from Richard Howitt on IIRC efforts:

We aren't just talking about harmonisation and collaboration; we are actually doing it .... And this year we are on the verge of putting together a joint project to align different frameworks, starting with the TCFD [Taskforce on Climate-related Financial Disclosure], which we will be announcing in the next couple of weeks. It will be the biggest signal back to the market that this alignment is taking place.

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In this article, Nick Tapazio makes the case that:

Over the last 20 years, businesses have undergone dramatic change....Economists refer to this shift as the “rise of the intangible economy.” Non-financial and intangible assets such as intellectual property, customer relationships, brand, and human capital now make up a majority a corporation’s net worth...So, what does this move from tangible to intangible value on a company’s balance sheet mean for today’s financial professionals? Quite a bit, actually. Business leaders look toward management accountants to provide a true picture of an organisation’s value.

This is where integrated reporting may help.

The article includes a discussion of integrated reporting adoption around the world as well as links to AICPA resources. 

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