Integrated Reporting Award

The ARA acknowledges the International Integrated Reporting Council (IIRC) as the peak body leading the development of an International Integrated Reporting Framework. The ARA is also represented on the Business Reporting Leaders Forum (BRLF), the body representing the IIRC in Australia. The ARA has based the criteria for its Integrated Reporting Award on the IIRC Framework.

Integrated Reporting Defined

• Integrated reporting is a process that results in communication by an organisation about value creation over time.

• An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.

• An integrated report should be prepared in accordance with the International Integrated Reporting Framework (the Framework).

Fundamental Concepts

• The capitals - The Framework describes six categories of capital, namely: financial, manufactured, human, intellectual, social and relationship, and natural. An organisation is to use these categories as a benchmark when preparing an integrated report and should disclose the reason if it considers any of the capitals as not material.

• The business model - an organisation’s chosen system of inputs, business activities, outputs and outcomes to create value over the short, medium and long term.

• Value creation - value is embodied in the capitals the organisation uses and affects. The assessment of an organisation’s ability to create value in the short, medium and long term depends on an understanding of the connectivity between its business model and a wide range of internal and external factors. Those factors are disclosed in an integrated report prepared in accordance with the Framework.

Seven Guiding Principles (40% of criteria assessment)

Provide insight into the following areas for the short, medium and long term:

1. Strategic focus and future orientation - Insight into the organisation’s strategy and how it relates to the organisation’s ability to create value and its use of, and effects on, the financial, manufactured, human, intellectual, social and relationship, and natural capitals.

2. Connectivity of information – A holistic picture of the combination, inter-relatedness and dependencies between the factors that affect the organisation’s ability to create value over time.

3. Stakeholder responsiveness – Insight into the nature and quality of the organisation’s relationships with its key stakeholders, including the extent to which the organisation understands, takes into account and responds to stakeholder’s legitimate needs and interests.

4. Materiality - Disclosure of information about matters that substantively affect the organisation’s ability to create value over the short, medium and long term.

5. Conciseness - An integrated report should be concise.

6. Reliability and completeness - Inclusion of all material matters, both positive and negative, in a balanced way and without material error.

7. Consistency and comparability - Presentation (a) on a basis that is consistent over time; and (b) in a way that enables comparison with other organisations to the extent it is material to the organisation’s own ability to create value over time.

Eight Content Elements (60% of criteria assessment)

Answer the questions below for the short, medium and long term:

1. Organisational overview and external environment - What does the organisation do? What are the circumstances under which it operates?

2. Governance - How does the organisation’s governance structure support its ability to create value in the short, medium and long term ?

3. Business model - What is the organisation’s business model?

4. Risks and opportunities - What are the specific risks and opportunities that affect the organisation’s ability to create value over the short, medium and long term? How is the organisation dealing with them?

5. Strategy and resource allocation - Where does the organisation want to go and how does it intend to get there?

6. Performance – To what extent has the organisation achieved its strategic objectives for the period? What are the outcomes in terms of effects on the capitals?

7. Outlook - What challenges and uncertainties is the organisation likely to encounter in pursuing its strategy? What are the potential implications for its business model and future performance?

8. Basis of preparation and presentation – How does the organisation determine which matters to include in the integrated report? How are such matters quantified or evaluated.