(b) For the attention of the Finance Director
Notes on the role and benefits of integrated reporting to stakeholders
Aims of integrated reporting in effective communication
If we are to implement an integrated reporting approach, we should do so with the aim to improve the quality of information we provide to our stakeholders and to promote a more efficient approach to our corporate reporting activities which consolidates and draws upon different communication strands and methodologies. This should enable us to present a more efficient, cohesive approach to stakeholder communication.
Role of integrated reporting
HiLite’s integrated report should be designed to benefit all of our stakeholders who are interested in how we create value over time, including our hotel staff, the hotel customers, local communities where our hotels are located, suppliers and, of course, our investors. Importantly, our ability to create value is linked directly to the value we create for those stakeholders.
The primary role of an integrated report is to improve the quality of information available to our stakeholders, by communicating broader and more relevant information which can assist them in effective decision making, in particular for our investors (however, investors form only a part of this system). Research indicates that investors want broader information which goes beyond pure financial data, similar to the needs of our wider stakeholder groups mentioned above.
The benefits of integrated reporting
The benefits to stakeholders of using a broader information set are numerous and have been highlighted in several studies which have surveyed stakeholder attitudes to such information. The benefits include (amongst others): an improved relationship between HiLite and our investors, a greater insight for our hotel customers and our hotel staff into our organisation’s business model and the benefits we can offer them, strategy and long-term outlook, as well as a greater understanding of our use and dependence on different resources and ‘capitals’ and our access to and effect on them.
HiLite’s investors in particular would benefit from such information which informs investment decision-making. Using a broader set of information can also benefit them by providing a greater understanding of the drivers of our performance and value creation. With this information, they can be more confident of our long-term outlook and our ability to create value over time.
Benefits recognised at the company level could also impact on our stakeholders. For example, studies suggest that companies who adopt an integrated reporting approach outperform those which do not and have more long-term investors. This will clearly benefit all of our stakeholders, including our hotel staff and our customers.
Building relationships with our stakeholders
By providing information which stakeholders need, value and find useful will help us build long-term relationships with these
stakeholders. Information which stakeholders would value includes an overall explanation of our business model, how we generate our business and a well-articulated strategy and a clear understanding of our anticipated future opportunities/direction and risks. Stakeholders could then use this information in many ways, including to help manage investment risk, evaluate the hotel industry dynamics and the regulatory environment and to assess HiLite’s long-term prospects and stability.
This will be useful for our investors, but would also be important to our staff who are looking for employment stability and future employment prospects. Our local communities will also wish to see our commitment to the local economy in to the future. As a hotel business, we can stimulate local economies by bringing in tourists to the area to spend money in the local economies in which we operate.
Integrated reporting could help us to focus on aspects which materially affect our long-term ability to create value. Through communication to our stakeholders and transparency, the application of integrated reporting allows us to ‘tell our own story’, preventing analysts and external observers (such as the recent newspaper article) from making assumptions on our behalf.
Although institutional investors are largely interested in the financial performance and quantitative key performance indicators of HiLite, assessing other performance indicators is also likely to play a pivotal role in an investment decision-making process, including wider information for instance, environmental, social and governance issues, which will help investors to assess investment risks more fully.
Reporting on broader areas of value creation is likely to be important to a wide range of stakeholders also, offering an insight into business strategy, performance, governance and prospects, encouraging improved relationships with customers, employees, suppliers and local communities. Stakeholders are able to use integrated reporting information in the following ways:
– Economic analysis: to understand trends and externalities in the hotel industry which could affect the economic outlook and value creation of HiLite.
– Industry analysis: to understand factors driving competitiveness in the hotel industry and the potential for sustained value creation in an industry.
– Company strategy: to understand management quality and corporate strategy and evaluate our ability to respond to emerging trends in the hotel industry, such as disruptive technologies and consolidation of the industry.
以上就是acca SBL练习题，多多练习才能拿下acca！如果想要了解更多acca相关信息，请关注中公财经网。
