With the new Glasshouse site up and running, it’s great to be able to share some of the work we’re doing with our clients.
We recently recorded this podcast with Deborah Evans from LRQA for the BusinessAssurance.com website.
She talks about the need for better corporate reporting, and argues that organisations need to be more open minded about the issues which might affect their performance — industrial relations, environmental impact and ethical considerations can have critical impact on the profitability of a company, but far too many of them simply ignore these factors in their reports.
Companies which address these issues, she reasons, are likely to be more successful, and better corporate citizens — perhaps it’s no surprise that the materiality approach is already in use at BT, Ford and Nike.
It’s an exciting development in business ethics, and Deborah has everything you need to know…
Download the podcast (MP3)
1. Tim Kitchin | 27th November 2006 at 4:21 pm
One of the key benefits of materiality for organistaions is the prospect of reporting on less issues.
BT, for example, has also used materiality to dramatically decrease its off-line reporting and move many ’semi-material’ issues into on-line-only reporting approach.
One effect of materiality is therefore incumbent on concerned stakeholders to actively engage with companies online disclosures if they want to understand potential ‘blind-side’ issues organisations may be misassessing…
Another benefit of materiality is for organisations to seize back control of reporting scope and become less reactive over time.
What’s interesting at the BT report, in particular, is that it the scales are still biased towards stkaholders. BT is still more likely to report on an issue that is material to stakeholders (and to media people) than it is to report on issues which govern its own financial future.
Shareholder advocates should be pushing for stronger commercial dimension to materiality, and should expect to see this reporting bias shift over time towards questions of commercial sustainability - thus integrating the financial and non-financial materiality models.
This very question - the pragmatic integration of financial and non-financial reporting, will be the major battleground of the next 3- 5 years.