Remarkable efforts to achieve more usefulness and understandability of corporate reporting are being made year after year. However; the complexity of the current businesses coupled with the legal requirement of enterprises has served to decelerate the aims of corporate reporting. IR, (Integrated reporting), is making efforts to merge responsibility reporting with financial reporting. The combination primary goal is benefiting all the stakeholders in the organizations by emphasizing on value creation and future orientation. Empirical evidence from over a hundred companies has served to cement the immense significance of the implementation of the principles of the framework of International Integrated Reporting. According to Curtis (61), IIRF have worked to solve the arabesque challenge of achieving financial sustainability and economic stability in businesses, not to forget its role in value creation and addition.
The significance of corporate reporting cannot be overlooked. Emphasis on Integrated Reporting is gaining popularity in the US; however, the pace is too slow that it lags behind other countries in the globe. It is surprising that only two out of the seven companies in the pilot program of the International Integrated Reporting Council employ integrated reporting. The two companies are Jones Lang LaSalle Incorporated and Clorox Corporation. The former company is a multinational financial service firm that provides investment management and real estate services while the latter deals with household products globally. The two companies are the only ones in the US that have acknowledged the significance of Integrated Reporting, although the progress is not that encouraging.
On 13th October 2014, Clorox Corporation published its first Integrated Annual Report. Though the report was lacking in integrated disclosures and financial information; it highlighted some of the factors that assisted the Corporation achieve corporate and business responsibility. First, the Corporation aimed at increasing its brand investment in 15% of its investment and adding value to its products through promotional effort. “Secondly, through employee empowerment, the decision-making process was accelerated and operational processes streamlined” (Curtis 60). Employee empowerment also served to instill confidence in the employees as part of the owners of the business. Third, the company aimed at expansion activities through investment in new products and wider markets. Finally, the Corporation employed mechanisms that curb wastages. Consequently, there was a remarkable growth in the Corporation’s funds.
The features of the Integrated Report, as derived from Clorox's Integrated Annual Report, are that; it is a digital format. According to Curtis, (60), the format employs the futuristic principles of integrated reporting to estimate the current financial health of the company. In the Integrated Business Model, the strategies mentioned above are echoed in the General Caption. The second feature is the Scorecard that contains the companies profile and five subcategories. The section provides a summary of the report. The five subcategories are; financial/performance, planet, people, impact and product subcategories. The business subcategory includes three non-GAAP and four GAAP measures. The measures based on the Generally Accepted Accounting Principles include; economic profit, cash flows and earnings prior to interest and tax.
The only area of departure between Clorox’s Annual Report and other US companies is that Clorox excludes some financial information from its reports. Besides Clorox’s financial report includes a proxy statement explaining the financial condition and management’s discussion.
In conclusion by embracing Integrated Reporting ethical behavior is enhanced. At the core of the heart of Integrated Reporting, there is a corporate responsibility to all key stakeholders of a company. No one can gainsay the fact that Integrated Reporting have served to propel many firms in the right direction both financially and ethically.
Works cited
Curtis Verschoor. “Integrated Reporting: lags in the U.S.” Strategic Finance (2014) pg. 61- 63
