International Integrated Reporting Council

Definition

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession, and NGOs that aims to promote integrated reporting as a means to enhance the efficiency and effectiveness of corporate reporting. This initiative seeks to provide a more holistic view of an organization's performance by incorporating financial and non-financial information, particularly in the context of corporate social responsibility (CSR). The IIRC's framework encourages businesses to communicate how they create value over time, emphasizing sustainability and long-term impact.

5 Must Know Facts For Your Next Test

1. The IIRC was established in 2010 and has since worked towards developing a globally accepted framework for integrated reporting.
2. Integrated reporting is aimed at providing stakeholders with a clearer understanding of how a company operates and its long-term sustainability strategy.
3. The IIRC emphasizes the importance of connectivity between financial and non-financial information to show how organizations can create value over time.
4. Organizations adopting integrated reporting are encouraged to consider stakeholder perspectives when reporting on CSR performance.
5. The adoption of the IIRC's framework can enhance transparency, accountability, and decision-making for investors and other stakeholders.

Review Questions

• How does the International Integrated Reporting Council influence the way companies report their CSR performance?
  • The International Integrated Reporting Council influences corporate CSR reporting by promoting a framework that integrates both financial and non-financial information. This approach encourages companies to present a comprehensive picture of their performance, including social, environmental, and governance aspects. By doing so, organizations can better communicate their long-term value creation strategies while addressing stakeholder interests in sustainability.
• What are the key principles of integrated reporting promoted by the IIRC that affect corporate governance?
  • The key principles of integrated reporting promoted by the IIRC include strategic focus and future orientation, connectivity of information, stakeholder inclusiveness, materiality, and conciseness. These principles significantly affect corporate governance as they encourage boards to engage more comprehensively with various stakeholder perspectives while making decisions. The focus on long-term sustainability drives organizations to align their governance structures with broader societal expectations and values.
• Evaluate the impact of adopting integrated reporting based on IIRC guidelines on stakeholder engagement practices in multinational companies.
  • Adopting integrated reporting based on IIRC guidelines greatly enhances stakeholder engagement practices in multinational companies by fostering transparency and accountability. This framework encourages firms to consider diverse stakeholder perspectives when reporting on both financial performance and CSR initiatives. As companies embrace this holistic approach, they can strengthen relationships with investors, customers, and communities, ultimately leading to improved trust and reputation. Furthermore, this engagement promotes dialogue on sustainability issues and enhances the company's ability to adapt to changing expectations in different markets.

Related terms

Integrated Reporting: A process that results in a periodic integrated report by an organization about value creation over time, combining financial and non-financial data.

Corporate Social Responsibility (CSR): A business model in which companies integrate social and environmental concerns in their operations and interactions with stakeholders.

Sustainability Reporting: The practice of companies reporting on their environmental, social, and governance (ESG) impacts and performance to stakeholders.