How the Integrated Report shapes up

During the COVID-19 crisis organizations are being called to include particular information in meeting their reporting obligations. These include financial reporting information and governance considerations.

On the integrated report, the International <IR> Framework addresses multi-capitals and multi time-frames: both of which are especially relevant in the explanation of how the pandemic is affecting the organization’s process of value creation, erosion and preservation and the implications for the future sustainability/viability of the organization.

The publications listed below address the COVID-19 crisis in various areas: corporate reporting, governance, financial reporting, sustainability reporting and the integrated report. This list is not exhaustive or prescriptive and aims to be a useful resource for organizations.

The IRC’s FAQ and the King IV Guidance Paper

FAQ: Reporting in a time of Crisis

This FAQ issued by the IRC of SA addresses using the International <IR> Framework and other aspects of integrated reporting.

FAQ: Reporting in a time of crisis

King IV Guidance Paper: Responsible leadership in responding to COVID-19 

This Guidance Paper illuminates the potential implications for business that members of the governing body may need to reflect on and respond to, as well as in dealing with a future changed work environment or a new normal.  They are arranged under five key pillars:

  • Ethical leadership and the roles of the governing body and management
  • Human capital
  • Organisational performance, control, risk, opportunity and crisis oversight
  • Communication in a crisis
  • Strategy and recovery

King IV Guidance Paper: Responsible leadership in responding to COVID-19 

Useful publications

Integrated Reporting

Authentic reporting in challenging times

This article by Black Sun offers some tips to companies for reporting on the impact of COVID-19.
Authentic-reporting-in-challenging-times.html

 Reporting on the impact of COVID-19

Two key themes run through this publication from PwC:

  • The impact of the crisis varies from company to company: this reflects the significance of their business and industry. There will be few companies that are completely untouched by Covid-19, given its global economic impact, and any company reporting very limited effects will need to explain carefully the basis for its conclusions.
  • The timeline of the crisis also has major implications. For many companies their priorities, and therefore the content of their reporting, will change as the situation develops. Initially the focus has often been on explaining how immediate concerns about liquidity have been tackled, but this will move on to how the business is being operated through the crisis to safeguard its ongoing sustainability and, ultimately, how it is adapting to the changed business and economic environment.

Reporting on the impact of COVID-19

 The Challenges for Corporate Reporting post Covid-19

This article by Ian Mackintosh, chair of the Corporate Reporting Dialogue, emphasises that the world cannot continue to function based on the primacy of financial reporting above all else. Investors, employees, customers and other stakeholders must have access to reliable and comprehensive information, and this crisis makes clear there is a need to strengthen links between pre-financial and financial information.
The Challenges for Corporate Reporting post Covid-19, Ian Mackintosh

Assessing Coronavirus’s Impact on Your Business Model

Harvard Business Review: when a crisis like the coronavirus pandemic hits an organization, its executives need to assess the impact on their business model, both immediately and over the long term.
Assessing Coronavirus’s Impact on Your Business Model

Create a Resilient Business Model in the Face of Covid-19

As news of Covid-19 spread, organizations began considering how it would affect supply chain access, product launches, employee well-being and business continuity. But many failed to consider the importance of a resilient business model.
Create a Resilient Business Model in the Face of Covid-19

What’s At Risk: An 18-Month View of a Post-COVID World

Useful for when considering operating context, risks and opportunities and outlook
whats-at-risk-an-18-month-view-of-a-post-covid-world

Covid-19 Reporting Toolkit

A toolkit intended to help companies navigate the challenges of reporting on Covid-19 – its impact on their business, strategy and performance, and the measures they are putting in place to combat the virus’ effect on their customers, employees, investors and other stakeholders.
Koan_Covid-19_Reporting_Toolkit_V1.pdf

Some recent examples of COVID-19 reporting in Integrated Reports in South Africa

Governance and leadership

Accounting, governance and integrated thinking in the context of COVID-19

This technical report by the Wits School of Accountancy outlines areas that governing body members should consider in the pandemic.

  • Business continuity
  • Reassessments of strategy
  • Balancing flexibility with monitoring and control
  • Managing risks and opportunities
  • Governing financial metrics
  • Ensuring active stakeholder engagement

It offers: analysis of the financial reporting implications focusing on JSE listed companies (including: impairment of non-financial assets, modifications to contracts with customers, and amendments to share-based payment arrangements); a review of assurance developments and tax relief; and promoting integrated thinking with practical recommendations for business management.
Accounting, governance and integrated thinking in the context of COVID-19

COVID 19 – Going concern, risk and viability

This publication from the Financial Reporting Council in the UK focuses on three key areas of disclosure for consideration by boards.

COVID 19 – Resources, action, the future

This publication from the Financial Reporting Council in the UK looks at the role of reporting in uncertain times.

Leadership in a crisis: Responding to the coronavirus outbreak and future challenges

McKinsey outlines five behaviours to help leaders navigate the pandemic and recovery. Separate articles describe organizing via a network of teamsdisplaying deliberate calm and bounded optimismmaking decisions amid uncertaintydemonstrating empathy; and communicating effectively.
Leadership in a crisis: Responding to the coronavirus outbreak and future challenges

The future is not what it used to be: Thoughts on the shape of the next normal

This article by McKinsey lists seven elements for business leaders to consider as they plan for the next normal.
Seven elements for business leaders to consider

Outmanoeuvre uncertainty: Navigating the impact of Covid-19

This series of articles by Accenture covers financial and operational challenges faced by organisations.
Navigating the human and business impact of Covid-19

Deloitte – Combating Covid-19 with resilience 

This collection of articles addresses various business and resilience areas related to the pandemic.
Deloitte – Combating Covid-19 with resilience 

Financial reporting

JSE – Covid-19 related guidance notes and market notices

The JSE website lists their guidance notes and SENS announcements. offers other letters covering the COVID-19 crisis.
https://web.jse.co.za/issuer-regulation-covid-19
JSE Covid-19 Financial Reporting Requirements

SAICA – COVID-19 hub

The SAICA website offers an information hub for accounting, business, legislation, tax and UIF articles and publications related to the pandemic. The IFRS section lists the educational materials issued by SAICA and IFAC.
https://www.accountancysa.org.za/covid-19/

IFAC – Summary of Covid-19 Financial Reporting Considerations

The unprecedented level of uncertainty about the economy, future earnings and many other inputs that represent fundamental elements of financial reporting and there will be multiple financial reporting implications to be considered in the short and potentially medium term.
Summary of Covid-19 Financial Reporting Considerations

PwC – Reporting on the impact of COVID-19

The publication sets out how the pandemic affects various aspects of corporate reporting.  It addresses four areas of reporting: Going concern and viability; governance, risk and internal control, balancing the interests of shareholders and other stakeholders; and, the impact on a company’s financial results. The timeline of reporting is also addressed.
PWC Practical guidance

KPMG – What is the impact of Covid-19 on interim financial statements?
KMPG Covid-19 impact

EY – Five financial reporting implications to consider as a consequence of Covid-19

The novel coronavirus (Covid-19) pandemic presents huge challenges for preparers of financial statements.
Five financial reporting implications

EY – Reporting under Covid-19 webcast series
EY Covid-19 Webcasts

Sustainability reporting

A Post-Covid-19 Agenda for Sustainability Reporting

This article by BSR offers ways that companies can improve their sustainability reporting.
A Post-Covid-19 Agenda for Sustainability Reporting

An investor relations perspective: Why is ESG more relevant following Covid-19

This article on the Investor Relations Society of South Africa website says company narrative needs to be reframed: the messages now are about mitigating risk, measures taken to protect the financial position, and how the business is positioned strategically to weather this storm in the short term. This crisis will be overcome and companies need to plan and message that they are using the learnings and challenges currently faced as opportunities to be more resilient going forward. This will set apart companies that can weather the storm.
An investor relations perspective: Why is ESG more relevant following Covid-19

J.P. Morgan Perspectives ESG and COVID-19: Friends or Foes?

This paper has links to other articles and addresses: Will COVID-19 accelerate the sustainability initiatives? And the Rise of the ‘S’ (Social) and ‘G’ (Governance) pillars in ESG.
To access the paper, click here