Integrated Reporting in the Public Sector

Although initially developed with corporate users in mind, the emphasis of  on value beyond profit has many benefits for public sector organisations. Unlike traditional corporate reporting, this more flexible approach enables organisations to focus clearly on how they and their stakeholders define value in the short, medium and long term.

By Nick Topazio, Head of Corporate Reporting Research, CIMA

 

A 2014 International Integrated Reporting Council (IIRC) survey of public and private sector organisations using found the key benefits to be as follows:

 

  • Breakthroughs in value creation
  • Improving what is measured
  • Improving management information and decision making
  • A new approach to stakeholder relations
  • Connecting departments and broadening perspectives

 

When ‘value creation’ is also considered in a non-financial context, these benefits are equally applicable to the public and private sectors.

 

Alongside international organisations such as the World Bank Group and the United Nations Development Programme, has been adopted by many public sector organisations in the UK, including the City of London Corporation, the Welsh Government, the Crown Estate and government departments.

 

Closer to home, the Maritime and Port Authority of Singapore has embarked on a journey in emphasising that connectivity and long-termism resonates with the perspectives that underpin its work. is seen not only as a tool to improve external reporting, but also to promote cohesive, streamlined and integrated thinking within the organisation. The authority started by ensuring the Board and senior management understood and supported the need for initially focusing on integrating environmental and social reporting. The authority’s materiality assessment was guided by the Global Reporting Initiative and IIRC guidelines. The description of the business model connects capitals and activities to outcomes and material issues.

 

Another good example is the journey undertaken by the New Zealand Post. The group consists of a range of businesses providing communication and business solutions. Its mail business, New Zealand Post, delivers just under 700 million items a year to around 1.94 million delivery points. The group started using the Framework in its 2013 annual report, recognising that to be successful it needed to value all of the capitals that it uses. This approach is seen to both strengthen the group’s strategic thinking and the way plans are executed.

 

The group’s 2014 report is divided into six capitals - Relationships, Networks, Expertise, People, Environment and Finances. Each section describes what the capital is to the group, and the activities undertaken through the year that have affected the value of that capital. As a state-owned enterprise the group’s primary stakeholder is its shareholder, the Crown. It requires NZ post to operate on a commercial basis and return a dividend as well as being a good employer and take into account the interests of the community. provides the framework for the group to demonstrate commitment and delivery against these objectives as well as supporting on-going business transformation and integration through the removal of silos.

 

The adoption of is not an overnight process but there is much we can learn from those who have gone on the  journey and are now reaping its benefits for long term business success.

 

Further examples of case studies in the public sector are available in the report by CIMA and AICPA on ‘Integrated Reporting in the Public Sector’. View them at http://bit.ly/1ZNMldm

 

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