WORKSHOP on INTANGIBLES, INTELLECTUAL CAPITAL & EXTRA-FINANCIAL INFORMATION – an Untilled Field Ian Ball International Integrated Reporting Council September.

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1 WORKSHOP on INTANGIBLES, INTELLECTUAL CAPITAL & EXTRA-FINANCIAL INFORMATION – an Untilled Field Ian Ball International Integrated Reporting Council September 2014

2 NGOs Companies Investors Accounting Standard setters Regulators Chair: Prof Mervyn King CEO: Paul Druckman Who is the IIRC?

3 Business Network Investor Network IIRC Pilot Programme

4 Why : More than financials

5 International Framework The Framework

6 The Framework: Core features Content Elements Fundamental Concepts Guiding Principles Value Creation for the organization and for others The Capitals The Value Creation Process

7 The Framework: Fundamental Concepts The Value Creation Process

8 The Framework: Core features Content Elements Fundamental Concepts Guiding Principles

9 The Framework: Guiding Principles Strategic focus and future orientation Connectivity of information Stakeholder relationships Materiality Conciseness Reliability and completeness Consistency and comparability Underpins preparation Informs content Presentation of information Judgement is needed

10 Questions to be answered Unique story Connections apparent Not a set sequence Not isolated, standalone sections The Framework: Content elements Organizational overview and external environment Governance Business model Risk and opportunities Strategy and resource allocation Performance Outlook Basis for preparation and presentation General reporting guidance

11 Discussion Paper Prototype Framework Emerging Database Building the Business Case for Background Papers for IIRC Pilot Programme Yearbooks The Framework journey so far… Basis for Conclusions Summary of Significant Issues The Framework journey

12 Discussion Paper Prototype Framework Emerging Database Building the Business Case for Background Papers for IIRC Pilot Programme Yearbooks The Framework journey ahead Basis for Conclusions Summary of Significant Issues Framework Development Guidance and Practice Thought leadership Academic community Databases Evidence Base

13 Votorantim link to their Report 2012

14 - Global Uptake

15 South Africa endorses the Framework

16 Sasol annual integrated report 2013

17 set for take-off in Singapore

18 DBS Bank Annual Report 2013

19 promoted by G100 and major Superannuation Funds

20 Stockland Annual Review 2013

21 Brazilian Stock Exchange calls for “Report or Explain” on Integrated Reporting

22 Itaú Unibanco Integrated Report 2013

23 European Commission hails as “step ahead”

24 Eni Annual Report 2013

25 crucial part of ‘Japan’s Revitalization Strategy’

26 Lawson, Inc. Integrated Report 2013

27 Harvard Business School study hails as enabler of financial stability

28 Prudential 2014 Proxy Statement

29 India: Lab backed by CII

30 “We have established a task force consisting of cross functional members representing the key functions of the organization to develop this integrated report. This task force will develop understanding of the process of value creation in terms of the financial, manufactured, human, intellectual, social and natural capitals. The concepts of connectivity and value creation will improve the organization’s systemic thinking and increase its efficiency with the changing environment.”

31 UK Guidance on Strategic Report consistent with

32 HSBC Annual Report 2013

33 Malaysian Prime Minister declares business take up of

34 The World Bank implement

35 Recommendation to G20 on

36 Where do intangibles fit? Why the untilled field? Does the field have well-defined boundaries? What count as good examples? How do we identify the best “measures”? The “unique story”/comparability trade-off Intellectual capital, human capital and social and relationship capital – does the categorization work?

37 Final Comments Attribution theory – In reporting – In relation to outcomes Public sector application – Initial focus of – Pioneer network Regulation – Not yet…

38 Eni

39

40 Omron on intellectual property

41 International Integrated Reporting Council