When the King III Report was first released in 2009 many readers were no doubt intrigued (and confused) by the extensive reference to ‘integrated reporting’. The Report itself didn’t help much with only a limited definition of the term.

Companies listed on the JSE in South Africa were, however, obliged to apply the principles and recommendations of King III, or to explain why they were not doing so (this is because the King Codes fall into the JSE Listings Requirements).  King III applied to their financial years starting on or after I March 2010.

One year later and it appears that many companies have issued combined reports, i.e. merely adding sustainability information to their annual report.  And dare I say it, a ‘tick box’ approach (against the list of recommendations in King III) may have come to the fore with some companies.

But this is fine, I guess – as a starting point.  It is widely acknowledged that integrated reporting will be a journey. First, you need the top leadership (including the CEO) to buy into it and for the board to consider and adjust the strategy of the business with a view to its dependencies and impacts on social, environmental, economic and financial systems. Then the business needs to install operating systems to get the relevant sustainability information (and part of that process is deciding which of the many measurement approaches you will use for various issues, for example carbon emissions).  And then, the acquired numbers need to get into the monthly and daily decision-making of management (to achieve ‘integrated thinking’). After that, it’s a matter of getting the staff to consider sustainability issues in their daily decision-making and everyday lives (so that everyone sings the ‘integrated thinking’ song in unison). Yes, indeed, it’s a long and winding road.

Companies, however, are not alone on their journey. In January 2011, South Africa’s Integrated Reporting Committee (IRC) issued a Discussion Paper on the principles of an integrated report and suggested some elements that could be included in an integrated report. The Paper was open for a three-month public comment period and over 40 comment letters were received (which is an impressive number say people in the know who regularly deal with responses to reporting discussion documents).  The IRC will in the near term issue a media statement outlining the way forward.

On the international front, the much-anticipated discussion document on a framework for an integrated report from the International Integrated Reporting Committee (IIRC) is expected to be released soon. And the IIRC is currently establishing a pilot programme of 200 companies around the world to test out its framework.

Wow! Integrated reporting is becoming mainstream.