Home Articles SPECIAL REPORT: Integrated reporting A director’s perspective

SPECIAL REPORT: Integrated reporting A director’s perspective

Linda de Beer discusses the lessons learned, benefits gained, and views developed since the adoption of integrated reporting in South Africa

The three to four years of experience in preparing integrated reports has been a difficult but value-enhancing journey for many corporate boards in South Africa.

When King III was adopted in 2010, it was in the absence of clear direction as to the objective of integrated reporting and detailed guidance on the content of an integrated report.  Since then companies have benefited from local and international discussion documents and welcomed the release of the Integrated <IR> Framework by the International Integrated Reporting Council in December 2013.

Despite good intentions, the first round of integrated reports in 2010/11 were not very integrated and in some instances not much more than a mere stapling together of different standalone reports. However, over time integrated reports have become much more focused, entity specific, informative, and indeed integrated.

As the chairman of a number of listed company audit committees, I was asked to reflect on the lessons learned, benefits gained, and views developed since the adoption of integrated reporting in South Africa. Here are my three key thoughts.


Integrated reports are not prepared to outshine competitors or win reporting awards. The objective of an integrated report is to communicate in a responsible, transparent and user-friendly manner to key stakeholders. This aim should be front of mind for everybody involved in the drafting process. If so, the company will be directed at understanding the information needs and legitimate expectations of its stakeholders, and addressing those needs and expectations through various processes, one being the integrated report.

It is inevitable that once a company commits to such responsible, transparent and user-friendly communication, the board of directors takes charge of the integrated report and the reporting process. Therefore such boards spend sufficient time considering the messages in the integrated report and the integrity of the information. The result is a high-quality, value-enhancing report instead of a marketing document with unnecessary frills, painting an unbalanced and overly rosy picture.


Boards that commence their quest for responsible and transparent stakeholder reporting via the integrated reports realise that internal reporting processes require improvement and streamlining. If certain pieces of information (for example financial performance measures, safety statistics, and water usage) are equally important, obtaining all of those pieces of information require reliable internal recording and reporting mechanisms. These recording and reporting mechanisms should all be subject to internal controls that ensure completeness, accuracy and timely reporting.

The focus on the content of the integrated report in some instances has led to the reverse engineering of internal processes as a result of companies realising that not only financial data is needed for both external reporting and internal decision-making.


As with many new phenomena, integrated reports created a prospective market for consultants seeking commercial benefits in offering services that range from the preparation of reports on behalf of the company to the assurance of elements of the integrated report.

Stakeholders reading the integrated report and the board signing off on it have a similar need for comfort as to the integrity of the information reported. Integrity and credibility, as opposed to external assurance, is the objective.

The quick and expensive way is for boards to have as much as possible of the data points in the integrated report externally assured. However, responsible boards that are conscious of how money is spent, data collected, and internal controls operate, as well as how the mechanics of the business fit together are willing to spend time to build a reliable combined assurance model.

Ultimately the reader of the integrated report wants a positive answer to one question – can the integrated report be relied upon and is the information accurate? Piecemeal assurance reports – for example from external auditors on the financial statements, from another assurance provider on sustainability information, and from internal audit on internal controls – do not constitute an attractive or integrated solution to complement this revolutionary form of reporting.

This has led to the new concept of integrated assurance. The board is responsible for the integrity of the integrated report and should give stakeholders such assurance by making a statement to the effect in the integrated report.

In order to obtain a level of comfort to support such an assurance statement, the board considers internal and external processes that support the integrity of the very many data points and pieces of information. Some of these confirmations might come from the board itself, for example knowing whether the company’s corporate governance disclosures such as board and board committee duties, meeting attendance, and activities are accurate. Other confirmation processes are undertaken by the various internal and external assurance providers.

It is an unfortunate shortcut when boards elect to obtain externally assurance on as much as possible of the integrated report. Taking the longer route of developing a combined assurance plan to give support to the board’s integrated assurance opinion is the only sustainable option. ❐

Author: Linda de Beer CA(SA), Chartered Director (SA), MCom (Tax) is chairperson  of the Financial Reporting Investigations Panel and Acting Professor in Accounting and Auditing at the University of the Witwatersrand