THINKING ON A BICYCLE: Gordon Gecko would be turning in his grave

By Jonte Goldwater

When Wall Street hit the cinema, it struck a nerve across a wide spectrum of people because it lifted the veil surrounding greed and single-minded pursuit for return at any cost. Gordon Gecko was a strangely appealing character because, for a large part of the movie, he not only won, he dominated. He was only interested in money and power.

The '80s gave us a lot that we look back on now with a tinge of discomfort. Raw and naked excess may have seemed great at the time, but boy did it hurt us later on. And that has all been for the better.

We now live in a world where we consider a lot more in relation to value, and that is a good thing. There is a new standard, and a new expectation that a company moving towards its rightful pursuit for profit does so in a balanced and sustainable way.

Over that past few years, we have been working a lot more closely with our clients to help deliver a simple, balanced and connected annual report that tells this story of value. This is a standard called the International Integrated Reporting Framework.

In essence an Integrated Report easily explains and links together the Capitals that a business manages to create value internally and externally for the short, medium and long term.

This is where the old 80's reference comes in handy because when I thought of capital in the past, I thought of money, and that made sense because that is what mattered when considering return and value… right? Um, not anymore.

Capitals are a range of inputs that a business needs to view evenly and in consideration of each other. Capitals are defined as a range of things such as people, manufacturing, partnerships, IP, social and finances.

They are all interlinked, and they are all critical in a company’s pursuit towards long-term sustainable growth.

Every business is on a journey in its ability to demonstrate value. The key is to clearly understand both how the framework works and then your partnership with your client, so you are hand and glove for efficient and effective implementation.

Delivering an Integrated Report requires high levels of communication and high levels of trust because this is a new journey, and it is one that takes business to new levels of disclosure and confidence.

In advance of embarking on your integrated report, there are a few factors that need to be in place before you start.

  1. Top-down buy-in for the integrated reporting framework and a mandate across the business for contributors of content to understand the 'why' to 'what' they are doing.
  2. Key project team to detail the over-arching principles of the Integrated Reporting Framework against the heading contents page to set up a map.
  3. A clearly defined business model that separates the capital inputs from the business activities and business outputs and outcomes across the short, medium and long term.
  4. A clear understanding of the business strategy in relation to the management of the capitals and how that informs value both for the company and the external world.
  5. Clarity and understanding of the stakeholder relationships alongside external risks that will affect materiality.
  6. A plan that addresses the critical risks as defined by your material impact.

Once this detail is worked through and the right information is in place, then the magic can happen. This is where our good friends in the design department get involved in helping tell the story, illustrate the links and generally make it simple and easy for an investor to track and trace the threads that link the value of the business together.

Today value is judged on multiple levels, and the businesses that can easily tell that story are the ones that will win. The '80s were a long time ago and there is no room for the Gordon Geckos who cut and run at the expense of people, product and environment.