The Australian Securities and Investments Commission (ASIC), your stakeholders and your people want to know more. Just in the past few years, we have seen a raft of new reporting requirements introduced – such as reporting on your business’s impact on the environment and society (broadly known as ESG) as well as your policies around whistleblowing, anti-money laundering and fraud. Australian Border Force compiles Modern Slavery reports for mandatory reporting entities, and increasingly, voluntary entities. Large organisations are now obliged to report on Payment Times to their suppliers and contractors.
While this is largely constrained to the larger end of town, once the systems and data flows are established, we anticipate that this will become the norm for mid-sized businesses in the next five to ten years. And of course, we can expect new measurements and reporting requirements in future – with cyber security and privacy breaches on the horizon.
We recognise the burden of reporting on organisations – particularly when it’s a new reporting requirement. However, the benefits to shareholders, Boards and policymakers of robust reporting lends itself to better business performance, investor confidence and policy frameworks geared to address business trends.
If you are not currently required to report on measures outside of finances, we strongly suggest you make an early move and start now.
Many Australian organisations have implemented an Integrated Reporting (IR) framework. It’s a voluntary reporting framework that assists entities to gain a better understanding of their organisation, and a means through which the business can communicate an effective, holistic story of themselves to stakeholders.
Organisations that have adopted an IR framework have flourished by speaking one common language, referring to one common source of truth, and resulting in a more collaborative workplace. Some have found they can make decisions faster, based on stronger evidence, as they gain a better understanding of the risk profile they are facing.
It’s a key tool in your arsenal when looking to raise capital or raise debt. It can help you to allocated capital in better and more efficient ways. It supports better reporting to employees and regulators. For NFPs and ‘for purpose’ institutions, it’s a source of invaluable information and measurements for potential donors and funding avenues.
Another upshot of investing in IR early is that you have an opportunity to build processes and data sources that mature as your business does and puts you in prime position when you are required to report on different metrics and policies in the future.
Implementing IR doesn’t happen overnight. The best approach is to identify what best practice looks like, identify the keys improvements that are required and then, over time, make the changes to your reporting and thinking. How long this takes varies between organisations, but all journeys start with a first step.
For more information around how your organisation could implement this type of reporting, please get in touch.
Learn more about how our Financial reporting advisory services can help you
