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INTEGRATED REPORTING AND XBRLEnhanced ReportingEvolved Decision Making Empowered Stakeholder Relationships
An XBRL Canada Webinar
Liv Watson and Brad MonterioJanuary 25, 2011 12:00 – 1:00pm
Brad is Managing Director of Colcomgroup, Inc.
Brad has been working with the XBRL standard – and its predecessor, XFRML – since 1999 when it was created by Liv Watson, Charlie Hoffman and a handful of other data and accounting experts. Today he counsels the global XBRL consortium and many of its members in a number of areas, including: strategic planning, new market development, messaging and positioning, marketing and communications; media relations; government and legislative affairs; sponsorship and fundraising, membership recruitment, and strategic partner development.
Brad currently Chairs the Institute of Management Accountants’ XBRL Committee and leads it efforts to educate global members about XBRL and its benefits, and to develop strategic partnerships with XBRL technology vendors and education providers.
He speaks and writes on XBRL topics regularly, including integrated reporting and sustainability reporting. Brad has recently co-authored “Bringing Order to the Chaos: Integrating Sustainability Reporting Frameworks and Financial Reporting into One Report with XBRL” with Liv Watson as part of The Landscape of Integrated Reporting published by Harvard Business School. Along with Kofi Annan, Robert Zoellick Duncan Niederauer, Liv Watson and other thought leaders, Mr. Monterio is a co-author of the book, “Trust Meltdown: The Financial Industry Needs a Fundamental Restart,” published by Media Tenor International, a leader in reputation management analytics. Brad has also written for Strategic Finance (from the IMA), SENSEX (from the Bombay Stock Exchange), Business Finance Magazine, California CPA (from the California Society of CPAs) and others.
Brad is Managing Director of Colcomgroup, a consulting firm that provides XBRL , ESG and integrated reporting advisory services . He is also Managing Director of CMH Partners*, an investment banking advisory firm and holds FINRA Series 63, 7 and 79 licenses in the capital markets. *All securities offered through Mid-Market Securities LLC, a FINRA/SIPC registered broker dealer.
Brad MonterioManaging Director
OFFICE EMAIL
New York [email protected]
TODAY’S SPEAKERS
HISTORICAL CONTEXT
ENHANCED REPORTING What is integrated reporting?
EVOLVED DECISION MAKING Applicability and benefits
Role of XBRL
EMPOWERED STAKEHOLDER RELATIONSHIPS What does it all mean?
Q&A
AGENDA
The Digital Language of Financial and Business Reporting
Validation
Standardization
CalculationCash = Currency +
Deposits
FormulasCash ≥ 0
Contexts
US $FY2004
Budgeted
LabelcashCashEquivalentsAndS
hortTermInvestments
ReferencesGAAP I.2.(a)Instructions
Ad Hoc disclosures
PresentationCash & Cash Equivalents
XBRLItemXBRLItem
PresentationComptant et Comptant
Equivalents
Presentation
Geld & Geld nahe Mittel
Presentation
Kas en Geldmiddelen
Presentation
现金与现金等价物
Presentation
現金及び現金等価物
Presentation
Деньги и их эквиваленты
Presentation
Гроші та їх еквіваленти
Other Linked Data
XBRL OVERVIEW
Adding Meaning to Electronic Business Data
Securities Act of 1933: This law, together with the Securities Exchange Act of 1934, which created the SEC, was designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing.
Creation of the US Securities & Exchange Commission
CONTEXT
CONTEXT
A brief history of social reporting1991 Shell Canada report the first-ever new-style social/environmental report�
2009June 15
2010June 15
2011June 15
2012June 15
Primarily Financial Statements + Detailed FootnotesTier 1
Primarily Financial Statements + Block Text Tagging
Companies Impacted : Worldwide public float above $5 billion/ Approx. 500 companies.
Tier 2Primarily Financial Statements +
Block Text TaggingPrimarily Financial Statements + Detailed Footnotes
Tier 3 Primarily Financial Statements +
Block Text Tagging
Primarily Financial Statements + Detailed Footnotes
Companies Impacted :Worldwide public float above $700 million / Approx. 1,000 companies. Companies Impacted :
All additional SEC registered companies /Approx. 8,500 companies:
2013June 15
The SEC XBRL Phased-in Mandated Timeline
CONTEXT
Pros and Cons
© Colcomgroup 2009
GOOGLE HITSGreen Reporting
37 MillionCSR Reporting
14 MillionEnvironmental Reporting
9.6 MillionIntegrated Reporting
9.1 MillionSustainability Reporting
6.5 MillionESG Reporting
.25 Million
A ROSE BY ANY OTHER NAME…
Pros and Cons
© Colcomgroup 2009
SUSTAINABILITY
The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
World Commission on Environment and Development (The Bruntland Report)
FINANCIAL REPORTING
SUSTAINABILITY REPORTING
INTEGRATED REPORTING = ‘MERGING’ OF FINANCIAL AND NON-FINANCIAL INFORMATION
MATERIALITY IS KEY
“Achieving truly integrated reporting is far more than a technical exercise. It is [the]
challenge to mesh two fundamental traditions of
corporate disclosure—financial reporting (FR) and sustainability
reporting (SR)—that embody distinctly different definitions of
the nature of the firm.”
Allen White, Tellus Institute
ENHANCED REPORTING
FINANCIAL REPORTING
SUSTAINABILITY REPORTING
Mature practice area Established standards and
frameworks for reporting High credibility and reliability Strong market reliance for
decision making – solid link to economic value
Emerging practice area Multiple standards and
frameworks for reporting Low credibility and reliability Growing market reliance for
decision making – weak link to economic value
CHALLENGE: ACHIEVE EQUILIBRIUM
ENHANCED REPORTING
Challenges to overcome
Not universally understood by companies and stakeholders Link to economic value not apparent Usually not in the strategic or business plan No uniform standard… yet Often championed by Marketing or PR, not C-Suite Hard to measure
http://www.fmd.co.za/Reference_library/2010/Review2010/FMD10_Rev_JSE_XBRL.pdf
Integrated Reporting Mandate
Role of XBRL
EVOLVED DECISION MAKING
SEC Data
Data Mining Technology with Internet Delivery
EVOLVED DECISION MAKING
Technology enabled content
SUPPORT
ONE REPORT
ONE DATA SET
Accountants
Attorneys
Other External Advisors
DASHBOARDS & OUTPUT
Other Stakeholders (e.g., Board, Investors, Regulators)
Accountants
Attorneys
Other External Advisors
Management Teams(CEO, CFO/Finance, Operations, Sales & Marketing, IR)
Access Controls and Permissioning
THE CLOUD
One Integrated Reporting ProcessManagement Teams(CEO, CFO/Finance, Operations, Sales &
Marketing, IR)
ENHANCED STAKEHOLDER RELATIONSHIPS
Integrated Reporting Strengthens…
Supply Chain Partners
BrandReputationEngagementCommunicationMarket Value
Organization
Workforce Investors & Analysts
Public
Regulators
Advisors
Better stakeholder engagement leads to stronger: