World renowned expert on corporate governance and sustainability, and chairman of the International Integrated Reporting Council (IIRC) Prof. Mervyn King continued to champion the cause of integrated reporting, highlighting that integrated reporting is not about how much money an organization makes but how it is made and the impact it has socially, environmentally and financially.
Delivering the keynote speech at the inauguration of the Corporate Directors Programme organized by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Securities and Exchange Commission (SEC), Prof. King said, “Integrated reporting is not about how much money you make but how you make it and while making money how it impacts financial, social, environment aspects.”
He noted that an integrated report, unlike the more conventional financial report which primarily focuses on the financial aspect, shows how a company sustains the value creation, enhancing the impact on society, environment and finance.
“An integrated report shows how an organization brings sustainability into their organization, so readers can make an informed assessment to understand how the business will sustain on the longer term,” Prof. King, a former judge of the Supreme Court of South Africa, and Chairman Emeritus of the Global Reporting Initiative (GRI) in Amsterdam said.
He emphasized that integrated reporting is a clear and understandable way to tell stakeholders how the board has applied the minds collectively to the sustainability issues relevant to the business of the company, while giving stakeholders a long term strategy for as far ahead as 20 to 30 years.
Prof. King who is well known for chairing the King Committee on Corporate Governance, which issued three comprehensive reports in 1994, 2002 and 2009 endorsing an integrated and inclusive approach to corporate governance in South Africa said that the integrated reporting helps a company’s stability, as it not only focuses on the financial aspects but look at other significant areas; social and environmental, which are important in the current context.
“Stakeholders expect that the company has not profited at the expense of the environment, human rights, a lack of integrity or society,” Prof. King disclosed.
“Companies cannot solve 21st century problems with the same mindset their boards used when they created them,” he told a houseful audience consisting of some of Sri Lanka’s top directors.
He noted that traditional accounting and reporting emphasised discrete assets, presenting them as additive rather than interdependent. “In the modern economy, it is increasingly the interaction among assets, e.g. people, technology, capital, networks, that drives value creation,” he added.
Delivering the welcome speech, CA Sri Lanka President, Mr. Arjuna Herath said that CA Sri Lanka had been contemplating the launch of the Corporate Directors Programme for a long time, as far back as a decade since the launch of the Code of Best Practice on Corporate Governance with the Securities and Exchange Commission.
“We believe that there is a need for the Code of Best Practice on Corporate Governance to be understood in its proper perspective, and the true spirit of it entrenched when embracing and adopting it. It is in this context that CA Sri Lanka along with the Securities and Exchange Commission embarked on this programme,” he said.
Mr. Herath noted that the Corporate Directors Programme will truly be an enriching, insightful, and a rewarding experience for directors, helping them fine tune their performance in the boardroom.
Chief Guest at the event, Dr. Nalaka Godahewa, Chairman of SEC said that Sri Lanka is currently at a very important juncture as a post war nation.
“It is also time for companies to stop focusing on a local aspect and think globally. The fact that our country is located strategically and we are a commercial hub in the world, works well for us, so it’s important that our companies use this to their advantage and look at the global picture,” he added.
Dr. Godahewa noted that the world was constantly changing, so were the rules, regulations and requirements. “In such a context, it is important for our directors to be educated on corporate governance, social responsibility and risk management among other important areas which are of concern in a global context. That is why this programme is important because it will not only help our directors, but will also help Sri Lanka progress to a global level.”
He added that the fact that some directors command senior positions in the corporate world should not stop them from learning. “We can’t stop learning just because we command a senior position in the corporate world. There is nothing wrong with learning and we are never too old to learn,” Dr. Godahewa added.
Guest of Honour, Mr. Krishan Balendra, Chairman of the Colombo Stock Exchange congratulated CA Sri Lanka and SEC for organizing the Corporate Directors Programme, a programme, which he said would enhance and upgrade the skills of directors. “This is a timely programme, with eminent lectures and panelists conducting it. I encourage all directors to attend this programme,” he added.
