Integrated Thinking Principles published, focusing on business modelThe Value Reporting Foundation published its six Integrated Thinking Principles on Tuesday, with the goal of helping organizations embed integrated thinking into their endeavors.
The Value Reporting Foundation took a big step forward toward helping organisations embed integrated thinking into their endeavours with the publication Tuesday of its Integrated Thinking Principles.
Six principles were articulated by the Value Reporting Foundation, with the business model sitting at the centre as the core of enterprise value creation. The principles provide a structured approach, rooted in the International Integrated Reporting Framework, for unlocking the full intrinsic value of an organisation's intangibles.
The principles (available for download here) and the framework provide structure for organisations' reporting to investors through an integrated report based on IFRS and sustainability accounting standards. The goal is to enable better assessments by providers of financial capital on how an organisation creates, preserves, or erodes value over time.
The six principles, which surround the business model and encompass the key activities overseen by the board and managed by the senior management team, are:
- Risks and Opportunities.
The publication of the principles was welcomed by Andrew Harding, FCMA, CGMA, chief executive–Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA.
"We are particularly pleased to see that the business model framework concept is at the heart of the principles, especially considering the growing focus on ESG and sustainability in corporate decision-making and reporting," Harding said in a statement. "Now more than ever, it is essential that accounting and finance professionals work in an integrated manner and support their organisations in rethinking how they create value for all stakeholders. The Integrated Thinking Principles will help organisations reach this goal and will be a good complement to our soon-to-be-published updated Global Management Accounting Principles, enabling corporate reporting to stay fit for purpose."
The principles are designed to provide a structured approach for considering how to create the right environment within an organisation, as well as reviewing for what can go wrong. The principles also are interconnected and offer a comprehensive leadership and management philosophy and a gauge by which an organisation can evaluate how effectively integrated thinking is being practised while identifying areas for improvement.
The principles will be supplemented by a detailed methodological guide on how to embed them into an organisation's day-to-day processes and practices. The Value Reporting Foundation expects to publish the guide in the second quarter of next year.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is FM magazine's editorial director.