Chapter 4 - IR

Question 1

3 main concepts of IR

Answer 1

Integrated Thinking Integrated Reporting Value Creation

Question 2

6 capitals of IR

Answer 2

FIM-NHS: Financial Intellectual (intangible knowledge) Manufactured (like PPE owned or not) Natural Human (competencies, ability, experience) Social and Relationship (license to operate, other stakeholders, brand recognition)

Question 3

Guiding Principles (How info is presented)

Answer 3

1.Strategic and prospective outlook 2.Connectivity of different info to add value 3. Stakeholder relationships 4. Materiality 5. Conciseness 6. Reliability and completeness (positive and negatice) 7. Consistency and comparability (over time for example)

Question 4

Content Elements (What with questions)

Answer 4

ALL OF THIS SHOULD BE ADDRESSED: 1. Organizational Overview and External environment (landscape) 2. Governance 3. Business Model (flowchart and diagram) 4. Risk and opportunities 5. Strategy and allocation 6. Performance (quali and quant assessment, perf tracking) 7. Outlook (future) 8. Basis of preparation (materiality and criteria) 9. General reporting guidance

Question 5

Challenges of IR (from higher to lower)

Answer 5

1. Materiality (materiality filter) - BIGGEST CHALLENGE Because IR uses a multi-capital approach, a user needs information that has passed through a materiality filter. This material information should be useful to providers of financial capital and other users

2. Data quality
3. Assurance (validatiton and checks)
4. Lack of standards (new concept)
5. Tone at the top (support from c-level)

Question 6

IR costs

Answer 6

1. Collection of new data sets 2. Hiring the right people 3. Setting up new internal control sYstems 4. Assurance on the IR 5. Disclosing true but negative and competitive info