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

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

Business Network Investor Network IIRC Pilot Programme

Why : More than financials

International Framework The Framework

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

The Framework: Fundamental Concepts The Value Creation Process

The Framework: Core features Content Elements Fundamental Concepts Guiding Principles

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

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

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

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

Votorantim link to their Report 2012

- Global Uptake

South Africa endorses the Framework

Sasol annual integrated report 2013

set for take-off in Singapore

DBS Bank Annual Report 2013

promoted by G100 and major Superannuation Funds

Stockland Annual Review 2013

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

Itaú Unibanco Integrated Report 2013

European Commission hails as “step ahead”

Eni Annual Report 2013

crucial part of ‘Japan’s Revitalization Strategy’

Lawson, Inc. Integrated Report 2013

Harvard Business School study hails as enabler of financial stability

Prudential 2014 Proxy Statement

India: Lab backed by CII

“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.”

UK Guidance on Strategic Report consistent with

HSBC Annual Report 2013

Malaysian Prime Minister declares business take up of

The World Bank implement

Recommendation to G20 on

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?

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

Eni

Omron on intellectual property

International Integrated Reporting Council