Speaking on Integrated Reporting at the 9th Sustainable and Inclusive Solutions Summit organized by the CII-ITC Centre of Excellence for Sustainable Development, Mr U K Sinha, Chairman, Securities and Exchange Board of India, invited CII to develop a roadmap on integrated reporting for discussion with SEBI. Mr Sinha clarified that SEBI will not regulate disclosures that demand integrated reporting. He stressed on the need to first create awareness and build the environment that is experienced with integrated reporting. He suggested this approach based on SEBI’s experience in the past of gradually improving transparency via various clauses of the listing agreement.
Mr Sinha acknowledged that Integrated Reporting is the next step in the evolution of reporting and that it marks a fundamental change in the way corporates communicate with their stakeholders. Questioning if corporates in India are ready for Integrated Reporting, he said, ‘we will be working along with industry to know in an incremental manner about integrated reporting rather than forcing something from our own side’, while adding, ‘some of you might have seen that when we have moved towards certain aspects of corporate governance we have been very careful also to see that the trade and industry is prepared for the changes.’
Mr Y C Deveshawar, Past President, Confederation of Indian Industry, Chairman, Advisory Council of the CII-ITC Centre of Excellence for Sustainable Development and Chairman, ITC Limited, emphasized the importance of rethinking capitalism and the role of reporting in it. He argued that the kind of corporate reporting in India and the rest of the developed world cannot be the same because of the different challenges that exist in the developing countries. According to him, responsible capitalism needs to be progressed with businesses synergizing the creation of shareholder and societal value in three steps; first with consumer value; second with utilizing resources; and third by replenishing resources. ‘By reporting you can stimulate the company to begin to think along these lines,’ and therefore he says, ‘reporting is a good thing, because if you can look at your resources like low hanging fruits, you can begin to utilize your resources better.’
Quoting Mahatma Gandhi, Mr Paul Druckman, Chief Executive Officer, The International Integrated Reporting Council, said that happiness is when there is harmony in what you think, what you say, and what you do. This harmony is missing in what companies are doing. Few businesses, according to him, can point to one voice of execution, and integrated reporting brings that consistency and cohesiveness to the business. He also mentioned that transparency is required but the information should be in context. Being the CEO of IIRC, he says that, ’Integrated Reporting is not about more reporting. It is not an additional layer, it is more about cohesive and concise reporting. Not allowing irrelevant information to obscure the really important issues that are likely to affect the sustainability of the business model in the long term which creates a sustainable environment for us all’. The pilot companies working with IIRC have reported favourably to Integrated Reporting as it introduces them to best practices, helps the business get noticed and also spurs innovation.
NEW DELHI
September 17, 2014