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Business

INTEGRATED REPORTING FRAMEWORK MARKS A NEW ERA OF MORE MEANINGFUL CORPORATE REPORTING

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Wayne Kolins

By Wayne Kolins, Global Head of Audit and Accounting at BDO

After months of consultation and hard work, this month’s announcment of a new Integrated Reporting Framework marks a game-changing milestone in the evolution of corporate reporting globally.

Wayne Kolins

Wayne Kolins

By focusing on a broader range of forward-looking finanical and non-financial risks and opportunities, the Framework heralds a new era in the relationship among business, society and the environment in corporate reporting. The Framework evolves business reporting beyond a review of financial performance into a concise communication about an organisation’s strategy, governance, performance and prospects in the context of its external environment – ultimately leading to the creation of value in the short, medium and long term.

So what does this Framework entail and what does it mean for businesses, investors and audit professionals?

The very fact that the Framework exists reflects the changing commercial, social and environmental context in which businesses are operating. We know from direct experience that investor demands are increasingly reaching beyond financial governance to other issues that have a material influence on the ability of a business to deliver enduring shareholder value.

As such, this Integrated Reporting Framework is a significant departure from exisiting reporting practices. It prescribes a range of reporting parameters which are generally lacking in today’s corporate reports. For me, there are three areas of particular significance:

Firstly, it illustrates connectivity of information. An integrated report should show a holistic picture of the combination, interrelatedness and dependencies among the factors that affect an organisation’s ability to create value over time. It provides an opportunity to articulate strategic aspects of an entity’s business without compromising its competitive advantage. As such, it creates a platform for demonstrating how unique business models are responding to changing stakeholder needs, threats, opportunities and the expectations in the market. Organisations successfully embracing this approach will not just have a better report, but also information that can drive short-term operational benefits and at the same time ‘future-proof’ the ability to deliver shareholder value in the medium and longer term.

Secondly, it shows strategic focus and future orientation. The priority for accountants and business advisers must be on helping organisations to future-proof their business plans. This Framework therefore includes provision for detailed insight into an organisation’s strategy and how it relates to its ability to create value – and mitigate any value destruction in the short, medium and long term.

Finally – and in my opinion, most importantly – the Framework extends beyond globally listed companies to SMEs, medium caps and private entities. We at BDO have worked closely with the IIRC over the past two years to shape the final version of the Framework, and have consistently championed the importance of a solution that works for businesses of all sizes – if integrated reporting is to be successful it must also reach SMEs, not just the largest companies listed globally.

We know from our work around the world that SMEs form the backbone of many economies. That’s why at BDO we pushed for the creation of a Framework that gives these businesses the right kind of reporting – not over-reporting, but the flexibility to tailor it to ensure it creates value for their stakeholders. And we believe that this has been achieved.

There is no doubt that the launch of the Framework marks a major milestone in the future of meaningful corproate reporting – but, there remain many issues for the IIRC to address in the coming months. Specifically: when will robust integrated reporting assurance criteria be available? Can integrated reporting lead to a reduction of the significant corporate reporting burden? Will there be sector guidance, given the different reporting requirements?

I look forward to our ongoing work with the IIRC to further this evolution in reporting so that, the entire business community we can continue to take great strides towards better and more transparent business reporting that will ultimately underping economic growth.

Business

How to communicate when the world is in crisis

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How to communicate when the world is in crisis 1

By Callum Jackson Account Executive at communications agency Cicero/AMO

Across sectors both private and public, the coronavirus crisis has brought with it a list of overused yet unavoidable tropes. Phrases such as ‘rapidly changing times’, ‘the new normal’ and the king of COVID clichés ‘unprecedented’ have been deployed by communications experts of all ilks to engage audiences, linking their products and businesses to the pandemic however they can. In fact, amongst online news articles from January to September this year, ‘unprecedented’ received about six times more column space than over the same period in 2019. The financial services sector is far from immune – a quick scan of the 21.9 million Google results which the search term “unprecedented banking covid” throws up reveals a distinct preference for the platitudinal over the insightful.

But as often as this is said, it bears repeating: communication plays a central role in all of our lives and all of our businesses. In the banking and financial services sector, one PR misstep can mean the difference between an investment round succeeding or failing, between a challenger being awarded its coveted banking licence or having its reputation demolished, between a fintech app appearing on every other smart phone in the country or dying an obscure death.

While communication is vital, however, it is not a straightforward science or art at the best of times. Below are some key approaches for comms professionals to consider taking when communicating during a crisis.

  1. Start with the bank in the mirror

In all sub-sectors of the comms industry, from in-house external comms to agency PR and everything in between, inauthenticity stands out like a sore thumb, and badly thought-through messaging or imagery can reek of it. Take Pepsi’s heavily pilloried 2017 ad campaign featuring Kendall Jenner, the imagery of which attempted to position the soft drink – and the business producing it – as a saviour of divided and oppressed communities. Accused of seeking to capitalise on the Black Lives Matter movement, Pepsi rightly pulled the commercial and apologised for missing the mark entirely. Interrogating what your business stands for, what it does well, what its goals are and, most importantly, what it is not in the business of (in the case of Pepsi, saving the world) is essential to communicating with your stakeholders authentically. This has been conventional wisdom amongst banking and finance grandees for a while. In 2015, Tesco Bank’s then CEO Benny Higgins noted, “Authenticity [is critical] – we all have strengths and weaknesses but being authentic gives a consistent notion of what your leadership is about.” By all means, talk about doing good but make sure it’s good you’re actually doing.

  1. Read the room

Being aware of your audiences’ needs is two-fold. First, it is about identifying the topics that consumers of news (be they your customers, your suppliers or the general public) want and need to hear about, and secondly, it’s about being sensitive to audiences’ anxieties and preoccupations. Our current environment is characterised by companies asking staff to take pay cuts, having furloughed others at 80% of their salary, all while social distancing or staying home. During these – yes, unprecedented… – anxiety-inducing times, money saving advice, working from home tips, and information on the best cost-saving financial products are subjects of interest and necessity to journalists and readers. Listicles of the best luxury summer getaways are not. Think about what your business or client is doing that might directly help those who are worst affected and use that as a springboard for your communications messaging.

  1. Look ahead

In late 2019, few of us could have foreseen the sheer magnitude of a potential pandemic, nor indeed its short-term and residual effects on the economy, society, and individual financial institutions. However, as professionals in charge not only of spreading the good news but also of putting out reputational fires, it is the duty of financial services PRs to game various scenarios – sorted by likelihood and impact – pre-empting possible outcomes and preparing for the negative fallout as well as the positive opportunities a situation might present. Looking ahead to identify these ‘opportunities’ is not per se a cynical attempt to boost business reputations or commercial outcomes. It can and should involve looking ahead to ascertain the potential silver linings, gifts in disguise, and diamonds in the rough that come along with a crisis. One unforeseen consequence of the COVID-19 pandemic has been a reminder of the warmth, appreciation and even love we feel towards the frontline workers of the NHS. If yours is the company that finances the manufacture of their uniforms, insures the production of their machinery, or invests on behalf of the factory that makes their PPE, you should be proud of that and should let others be proud too. All this requires

Callum Jackson

Callum Jackson

foresight, however – the ability to identify both the risks and opportunities of a dire situation.

  1. Adapt your offering

Shouting from the rooftops about something you do well, especially when it has a net good impact on the world, is nothing to be ashamed of. In fact, a surprising number of businesses are actually quite bad at telling us what’s good about them – particularly those that need to the most: banks. Cue the PR professional. But that quality of self-promotion – not in the sneering, braggartly sort of way; but rather the recognition that telling your story is how people get to know you – only stands up when what you’re promoting really is good, both morally and commercially speaking. If you are planning a campaign showing that your customer, The Big Bad Oil & Gas Company Ltd., is doing wonders for the planet, it had better be investing heavily in wind and solar, offsetting its carbon output and cleaning up natural areas affected by its commercial activities, and not just paying lip service to environmental conscientiousness. And if your customer or your own business isn’t doing those things, it is time to re-evaluate the corporate strategy. Too many heads of comms are cautious of recommending product and operational changes that require significant investment for fear of CEOs’ eyes rolling back into their heads with ‘dollar shock’. But if you want to be known for doing something good, you had better do it well.

  1. Take advantage of digital

It comes as no surprise that shares in videoconferencing services such as Zoom (NASDAQ: ZM) just about doubled between late January and mid-April (up to $142.80 from $70.44). As demand for online services increases due to prolonged social distancing and isolation measures, so too does the need for journalists, and therefore PRs, to produce quality digital content that speaks the language of technology. Rather than asking how your logo will change or about the latest appointment to your board, media and the audiences that read them are increasingly asking, ‘How does your company’s offering help us do business, manage our money, or lead better lives by harnessing smart data, open finance, AI, etc.?’ Or more generally, ‘How can I do all the things I’m used to doing and need to do without leaving my house?’ Most banks provide online banking, most insurers allow digital policy purchases and claims, most lenders enable virtual applications or use digital ID to confirm affordability and suitability. If your business is lagging behind, it’s time to catch up.

  1. Put a relevant twist on business as usual

“Well, our business doesn’t do anything to do with viruses,” is a natural reaction to a crisis that no one saw coming and that stands to affect the global economy in a meaningful way for years to come. But, as well as being natural, it is also limiting. Thinking creatively about the ways our product offerings and operations do, in some way, affect the outcome of a crisis does not have to extend to preventing the spread of a disease or accelerating the creation of a vaccine. It may be that your lending platform can offer mortgage holidays for those financially impacted by the pandemic or that the insurer you work for can interpret policies leniently and with compassion – especially important in light of the FCA’s recent finding on business interruption insurance. Showing your worth in a crisis does not require you to be a central cog in the machine, nor does it require you to dominate the narrative in order to have cut-through. Do your bit, however small, and then tell us about it.

Being alive to developments in politics, society, culture, science and business, and remaining nimble and ready to adapt to those developments sensitively are the cornerstones of good communications. The ancient Greeks knew this before we did; it was no storytelling accident that Olympus’ divine messenger, Hermes, wore winged sandals. The metaphor may be ham-fisted, but the sentiment is sound: sensitivity, fleet-footedness and boldness are the communicator’s greatest weapons. Don’t be a Pepsi, be a Hermes.

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Business

Efficiency vs productivity: how to maximise the output of streamlined teams

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Efficiency vs productivity: how to maximise the output of streamlined teams 2

By Julie Lock, commercial director at Mitrefinch

With the furlough scheme heading towards its conclusion over the coming weeks, the words ‘redundancy’ and ‘company restructure’ are sadly going to be commonplace across various industry sectors and regions of the UK.

Of course, the biggest challenges will fall to those that have lost their jobs, but another obstacle lies for those that are ‘left behind’; remaining within organisations that have lost colleagues and support staff. In addition to the emotional turmoil, questions remain around how reduced teams will be able to produce the output of work delivered pre-pandemic especially with significant workplace anxiety on the rise as it is.

For managers, the next few weeks could be pivotal to the short and long term success of their teams in terms in productivity as well staff satisfaction and retention. While companies might feel that choosing to hold on to certain members of staff is enough to recognise their value, it’s integral that moving forwards managers set clear and fair expectations to their teams that following the pandemic are likely to be operating at increased capacity.

Setting fair and attainable benchmarks

When done correctly, goal setting remains one of the most effective ways to maximise motivation amongst teams and setting these effectively over the coming weeks will be critical to understanding expectations and outcomes for both staff and management.

However, it is important that objectives are agreed amongst all parties before being put into action to ensure expectations are fair and realistic. For example, a team that’s had its headcount cut by 50% is unlikely to achieve the same level of overall productivity pre-pandemic, however there’s no reason it couldn’t be more than 50% with the correct strategy, tools and collaboration.

Pressure – while effective for some – also needs to be used carefully over the next few weeks. It’s no secret that many are struggling with some degree of anxiety as a result of the pandemic and for those returning to work it’s important this isn’t exacerbated further in the workplace.

Communicate effectively

Whether your full team is back in the office, all working remotely or a combination of the two, ensuring everyone is on the same page through effective communication is critical. There still remains so much uncertainty across different industries and surrounding Covid-19 in general that businesses cannot afford to not update staff as regularly as possible.

One of the main reasons cited amongst staff for messages getting missed is due to the fact they hadn’t seen it in their emails, on the company intranet or instant messenger etc. and this is why streamlining the software or overall means of communication can be an effective way to ensuring all staff don’t miss any updates.

The easiest way to do this is to agree with your team on the core methods of comms and ensure everyone sticks to this for core business discussions. At a time where you have the added barrier of not being in the same physical location, using one programme alone mitigates the risk of messages getting lost, and for emergency updates that may come out of hours, there remains a place for communication via SMS where 90% of messages are read within three minutes of being sent.

Collaboration is key

For those that are fortunate enough to keep their positions following rounds of redundancies and may still be working from home, work might feel like a bit of a lonely place right now. Collaboration, in whatever form is possible, will be instrumental to ensuring staff feel valued and remain motivated in the final months of 2020.

During challenging periods of the week, where stresses could normally be offset through a chat or conversation with a colleague in the offices, it’s important to ensure that staff talk to one another throughout the days to remind each other we’re all in this together.

Don’t let remote working limit your ability to collaborate – encourage your team to reach out to each other through conference calls or video chats. It’s often a good idea for management to instigate such collaborative sessions from the outset to get the ball rolling, then contact employees on a regular basis to ensure that they are still taking place.

For those who have been working throughout the pandemic this should no longer be a concern but for those returning from furlough you must ensure staff have easy remote access to any data and documents that they may need and that adequate security measures are in place to mitigate the risk of breaches. Ensure that some form of file-sharing system is in place and accessible to everyone before the remote working period begins – this is where brands should utilise cloud-based hosting where possible.

Identify and provide progression opportunities

Despite the ongoing challenges surrounding the economy and for many businesses, it is vital that personal development and career opportunities are not stunted as a result of the pandemic. While goal setting can help with this, it’s also crucial that realistic progression pathways are put in place for all members of staff.

These could be in the form of quarterly or annual objectives that encourage staff to develop their skill sets to allow them to progress their careers and ensure they feel as though they are still learning and developing even if this means that salary increases or promotions are out of the question at the moment.

However, regardless of the situation regarding pay rises or more official progression opportunities, it’s crucial that staff are kept in the loop with these conversations taking place at a higher level. While it’s likely that the general trend amongst businesses right now will be to maintain and stay afloat, there are still high growth businesses looking for the best talent so companies cannot afford to be complacent and assume staff will stick around.

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Time for the adaptive profession – APM reveals findings of its Projecting the Future report  

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Time for the adaptive profession – APM reveals findings of its Projecting the Future report   3

The project profession is at the forefront of change, but needs to continually develop skills to stay relevant

15 September, 2020 – Association for Project Management (APM) has released the findings of its year-long conversation with the project profession in its latest Projecting the Future1 report, The Adaptive Project Professional.

The report, which draws on contributions from APM members, project professionals and external organisations, sets out a series of ideas and insights to help shape the future of project management. It also highlights that now is the time to focus on the ‘adaptive’ project professional.

The adaptive project professional must be able to adapt in an era of unprecedented technological, social and environmental change. As the project profession will be at the heart of creating and delivering such change, adaptability is key. Adaptive professionals are characterised as being responsive to the shifting contexts in which they work, having the right skills set, continually learning, able to utilise new technology, engage with stakeholders, highly proficient communicators, leaders and managers of their project teams.

The coronavirus pandemic has demonstrated how adaption is so important in keeping up with the pace of change, from the building of the NHS Nightingale hospitals, the Ventilator Challenge, the government’s furlough scheme, and the race to find a find a vaccine for Covid-19 – and project professionals have been at the heard of making these innovative changes happen. As the report also highlights, the project profession will need to respond and adapt quickly to the other major challenges facing the world including climate change and the transformation of the economy by new technological advance.

Tim Banfield, chair of the Projecting the Future group which oversaw the debate said: “Project management already plays a pivotal role in the changing world and contributes an estimated £156.6 billion2 of gross value added to the UK economy. Moving forwards, adaption will be vital, both in how we help organisations adapt, delivering successful projects, and in how we adapt ourselves, continually developing and evolving our skills and behaviours to keep pace.

“The report sets out eight ideas to support a more adaptive profession3, one which will be centre stage in the effort to bounce back from the coronavirus pandemic and adapting to the challenges of the fourth industrial revolution, climate change and increasing human longevity.”

Debbie

Debbie

Debbie Dore, chief executive of APM, added: “The ideas and recommendations presented in the report are a result of APM listening to our members, and conversations about some of the most profound changes under way in our economy and society. Although we continue to face very challenging circumstances, the project profession should face them with confidence. Projects are how change happens and have played a vital role in the crisis response and will be every bit as important in reshaping, reviving and rebuilding the economy.

“Adaptive skills are essential, and it’s important for today’s professionals to take learning and training seriously, right the way through their careers. As the chartered body for the profession, APM continues to offer a range of qualifications and training to support a successful career in project management.”

Other core ideas to emerge from the report range from a need to build the profession’s talent pipeline, from starter to chartered: providing new routes into the profession both for young entrants, and for more mature professionals and mid-career changers. Hand in hand with that, there is a need to strengthen the culture of professionalism through life, supported by employer commitment to training and an ambitious new policy framework that caters for learning at all stages of life.

The Projecting the Future debate also demonstrates the desire of project professionals to have a more influential role in shaping the strategy of projects. Projects are how change is delivered, and so they are critical to strategy, and need to be a bigger part of strategy development across all industry sectors.

Promoting the profession and building its impact is also highlighted in The Adaptive Professional report, continuing to champion the importance and influence of the profession as an agent of change across the economy and society.

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