Annual reports do however remain the primary or only source of information for many investors.
With annual reports coming under increased criticism for their complexity, length and backward looking focus, this criticism suggests that change is needed.
Integrated Reporting aims to provide a remedy to those criticisms.
Using a principles-based framework to determine content, an Integrated Report presents information on the business model and strategic objectives, holistic performance and governance in a concise and transparent manner.
Three features of Integrated Reporting will represent a significant change to current practice:
- Holistic performance requires reporting to move beyond traditional financial metrics, recognising other measures of performance.
- Its longer term and forward looking nature will provide a better understanding of how current and future events affect value.
- Its integration of information with the business model will provide greater transparency, by linking performance to strategic objectives.