Submission to Treasury - Integrated Reporting

6 July 2011

Mr John Stanhope
Chairman
FRC Integrated Reporting Task Force
c/o The Treasury
Langton Crescent
CANBERRA ACT 2600
bruce.donald@treasury.gov.au

Dear John

Integrated Reporting

The Group of 100 (G100) is an organization of chief financial officers from Australia's largest business enterprises with the purpose of advancing Australia's financial competitiveness.

The G100 is engaged in, and is monitoring, developments regarding integrated reporting. As part of this activity the G100 participates in, and encourages its members to participate in, the Business Leaders Reporting Forum (BLRF) which is co-ordinated by the Society for Knowledge Economics. The BRLF involves a diverse range of interest groups including The Treasury.

The G100 advises its members of developments in integrated reporting in its regular Members' Update. In addition, the G100, as a member of the ASX Corporate Governance Council, recently participated in a CGC Task Force which reviewed Principle 7 'Recognise and manage risk' including whether any changes needed to be made to accommodate integrated reporting developments. The CGC has recently decided not to respond to these developments until the detail and direction of the proposals are clarified and a generally acceptable international framework exists.

The G100 has not yet taken a formal position on integrated reporting which is viewed as a means of integrating mainstream (financial), sustainability and governance reporting. Rather, it has chosen to participate in activities both to inform itself on behalf of its members and to inject the perspective of CFOs of large businesses to the discussions at the BLRF and to the International Integrated Reporting Committee when its forthcoming discussion paper is issued.

As an organization, the G100 has initiated and supported activities directed at improving the quality and relevance of business and financial reporting. In this regard the G100 supports the adoption of IFRSs in Australia and has initiated guidance for its members and others on the preparation of the review of operating performance and financial condition (Attachment 1). In addition, in response to a challenge from Sir David Tweedie at a G100/FRC workshop on Australia's experience with IFRSs, the G100 engaged PricewaterhouseCoopers to prepare a set of principles to be applied by the standard-setter (IASB) in setting disclosure requirements in financial reporting standards. (Attachment 2).

The G100 looks to integrated reporting as promising an approach which will address a number of the shortcomings of current financial reporting requirements and practice while providing shareholders and other users with a concise and understandable comprehensive report on the activities and performance of the company. These shortcomings include, but are not limited to, the increasing length, complexity and clutter in financial reports, the influence of a compliance mindset, the lack of strategic focus and undue emphasis on financial issues, the separation of external reporting from information used to manage the business and the relevance and usefulness of governance and remuneration information.

Yours sincerely
Group of 100 Inc

Peter Lewis
National President

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