Damien Walsh, bank MECU (Australia): Integrated Reporting…
Damien Walsh, Bank Australia’s Managing Director explains why values-driven businesses have an opportunity to lead the practice of Integrated Reporting.
Measurement is powerful. As business leaders what we choose to measure and report on will reflect our corporate values and impact the strategic direction we take. This is the case in a small business, a large corporation and in a global economy.
Growing calls globally from investors and communities for greater corporate transparency, fuller disclosure and broader performance assessment have created a push for companies to measure and report a more holistic picture of their performance and how they create shareholder value.
In recent years, this effort has crystallised under the banner of Integrated Reporting or <IR>. This area of reporting offers up an enormous opportunity for values-driven businesses like the members of the GABV because it helps us to more clearly communicate and evidence how our banks generate, distribute and retain value for our stakeholders.
More Than Financial Performance
How? Because <IR> demands that the business measures and is accountable for not only financial performance and impact but also for its unique social, environmental, and broader economic performance and impact. Not only for the short term but into the future.
This approach to reporting also recognises that companies do not exist and operate in a vacuum. There is an inherent interdependence between economic, social, cultural and environmental inputs, performance and impacts. As values-based banks, <IR> reinforces our approach to business and the outcomes we want to achieve for our customers and owners, the communities in which we operate and the environment we live in.
Ultimately <IR> is about improved and more complete communication and we believe this – if done well – will help forge stronger connections between our bank and its customers – and that’s good business. But it also has valuable internal benefits. <IR> encourages integrated thinking and transparency around corporate governance, risk management and strategy. It encourages assessment of the achievement of our broader business aims. It challenges us to find ways to measure and communicate that broader achievement. As a result integrated thinking enables the development of strong organisational cultures to achieve the goals of business in responsible ways.
Transparency, Sustainability and Diversity
The principles underlying <IR> closely reflect those of transparency, sustainability and diversity that were articulated in the GABV’s Berlin Declaration earlier this year. GABV members already have a deep understanding about how these principles translate into business practice and how they drive the achievement of business objectives, which is why we should be natural leaders in the worldwide movement towards <IR>.
At Bank Australia we’ve been on a reporting journey of some years and we are confident our approach to reporting is leading our business in the right direction.
We’ve always known that reporting on the whole picture of the business increases the transparency of our operations to our customers who are also our owners – it is a central plank of our accountability to them.
The first steps in this journey were in 2004 with our first Sustainability Report, which reported against the commitments we made under a Sustainability Covenant signed with the Victorian State Government.
In 2009, having received many awards for our work on sustainability reporting, we dispensed with the printed report and moved to an interactive online version; and, two years later combined the Annual Report and Sustainability Report into one online portal – an important step towards more cohesive reporting on the multiple dimensions of the business. The use of and innovation in technology enabled the Bank to enhance communication with its key stakeholders and the global community.
In 2012 we produced our first fully integrated report necessitating a significant shift in thinking and a process of breaking down internal silos – a sometimes challenging but highly rewarding exercise. This report won two special award categories from the Australasian Reporting Awards (www.arawards.com.au) for “Integrated Reporting” and “Online Reporting – Private”.
At the same time Bank Australia volunteered to become involved with the International Integrated Reporting Council (IIRC) Pilot Program and to contribute to the development of an integrated reporting framework. We became one of 90 companies across the world to participate in this important program including multinational corporations such as Coca-Cola, Clorox, Microsoft, Hyundai, Tata, Unilever, Marks and Spencer and SAP.
Bank Australia is one of the smallest members of the pilot and joins another GABV member, Vancity, in the program. Together we are punching above our weight to ensure the experience of values-based banking and the knowledge that sits within the DNA of our businesses is fed into the reporting process.
This approach to reporting of course is still in its infancy and there is much work to be done before we as an organisation, and the business community more widely, can say we are reporting in a manner that measures all the relevant inputs and outputs of our business and provides a truly integrated picture of our performance.
The IIRC recently completed a consultation process on a draft of an <IR> Framework designed, in its words, to ‘help businesses communicate value in the 21st century’.
The development of the framework, due to be released in 2013, recognises that while demands for transparency and accountability have led to a welcome change in the type and volume of information being provided by companies, there is a need for a new model of reporting to make the communication of that information more meaningful. <IR> is about better reporting not simply more reporting.
Having been on this reporting journey for nearly a decade I believe that <IR> is the future and that it will assist our business to better integrate our thinking around how to both create and communicate our values based value proposition.
Adopting this reporting model and having on-going input into its evolution and application are concrete ways that values-driven businesses, such as GABV members, can demonstrate their leadership in sustainable and transparent business practice while providing guidance and valuable lessons about responsible business practice to the rest of the business community.
Opinion Piece courtesy of Bank Australia.