‘A journey of a thousand miles begins with one step’: ICAN Nigeria establishes the Nigerian Integrated Reporting Committee
There is no doubt that integrated reporting is the future of corporate reporting. The way that it is adopted into local practice will vary from jurisdiction to jurisdiction, but it is clear that those that have not already implemented integrated reporting, must embrace the concept and start now.
As the saying goes, ‘a journey of a thousand miles begins with one step’. Nigeria took this one step in October 2019 with the formation and inauguration of the Nigerian Integrated Reporting Committee, which I chair, and is championed by the Institute of Chartered Accountants of Nigeria.
Prior to 2012, financial reporting dominated the corporate reporting landscape in Nigeria. Although a few multi-national companies prepared corporate social responsibility/sustainability reports, this was usually due to their Western-based head office calling on them to produce this information. These reports were not typically for publication or consumption in Nigeria.
This began to change when the Nigerian Sustainable Banking Principles were introduced under the auspices of the Central Bank of Nigeria and the Bankers’ Committee in 2012. These principles ushered in sustainable banking standards and guidelines for Nigerian banks, with sustainability reports – based on the GRI framework – used to benchmark a bank’s sustainability performance.
The Financial Services Regulation Coordinating Committee then took up this initiative, pushing sustainability beyond the confines of banks to all financial institutions.
The Nigerian Stock Exchange also led by example in publishing its own sustainability report, as well as launching voluntary sustainability disclosure guidelines, which were eventually approved by the Securities and Exchange Commission in 2018.
Nowadays, all listed companies are encouraged to voluntarily adopt sustainability reporting and there are advanced plans to mandate sustainability reporting for ‘premium board’ listed companies.
However separate sustainability reports are too often still produced in silos, lacking the connectivity to strategy, governance, performance and prospects in the context of external environment, or the connection to the financials.
Investors in and outside Nigeria require a more integrated corporate report which shows how corporations in Nigeria create value employing all capitals and not just financial capital. The Council of the Institute of Chartered Accountants of Nigeria, realizing this, took proactive measures to establish the Nigeria Integrated Reporting Committee (NIRC).
At the NIRC, we are encouraging businesses to integrate the information in their IFRS statements and their sustainability reports, to produce an integrated report that communicates information across the International <IR> Framework’s six capitals.
The purpose of the NIRC is to serve as an influential committee that will promote and support the adoption of integrated reporting in Nigeria and West Africa in general.
Present at the first meeting of the NIRC were: The Financial Reporting Council (FRCN); Securities and Exchange Commission (SEC), The Nigerian Stock Exchange (NSE), Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), National Pension Commission (PenCom), National Insurance Commission (NAICOM) and Corporate Affairs Commission (CAC), KPMG, Deloitte, EY, PwC, Dangote Industries Limited and the Private Sector Advisory Group on SDGs.
Speaking during the inauguration, World Bank Representative, Patrick Kabuya, said that “integrated reporting will be a paradigm shift of thinking by boards and management on their business models, strategy and operations to mindfully incorporate the three dimensions of sustainable development: people, planet and profit, considering all capitals in long-term value creation.”
As a Governing Council member of ICAN, and a member of African Integrated Reporting Council (AIRC) and IFAC IPAE, I believe that with the inauguration of the NIRC, Nigeria has joined with countries who are at the forefront of better corporate reporting in its capital market, and, as we enter 2020, I look forward to working with the IIRC and AIRC to create awareness and adoption of integrated reporting in Nigeria.