Integrated reporting has been identified as a key method to help firms tackle future risks they face such as those posed by the Covid-19 pandemic. The Association of Chartered Certified Accountants’ (ACCA) latest report Insights into Integrated Reporting 4.0, covers 48 companies – each are members of the International Integrated Reporting Council (IIRC) Business Network. As economies and companies around the world prepare for imminent recession owing to the pandemic, the report recommends a focus on sustainability, resource efficiency and integrated thinking to help tackle risks companies face and improve the quality of their reporting. Richard Martin, head of corporate reporting at ACCA, believes accountants can develop their skills in <IR> and integrated thinking to help companies clearly communicate responsible resource management and how they intend to generate value. He said: ‘Resource management, both in times of crises such as these and relative calm, is essential. Companies should always be considering their use of employees, reflecting on whether they are continuing to grow and develop.
‘Insights into IR 4.0 comes out against a background of increased interest from authorities in improving corporate reporting outside of the financial statements. ACCA believes integrated reporting should be a key part of that, and not simply used as a marketing tool.’ The review is ACCA’s fourth annual report on integrated reporting, this year’s research shows steady improvements in some respects, including the recognition of integrated reporting and the IIRC’s Framework. Mr Martin, the report’s author, added that there are still key areas for improvement when benchmarking against the three previous Insights into Integrated Reporting. He said: ‘It is disappointing that the overall quality of the reporting based on the average score our reviewers awarded the reports has declined in the period. ‘This indicates that though companies’ stated following of the principles is increasing, the quality of that compliance is not. The descriptions around statements of responsibility for the reports could also be improved.’ With Covid-19 presenting unprecedented challenges for financial professionals and businesses across the globe, ACCA is creating and curating content and resources to help organisations deal with the impact and the recovery from the pandemic. Included are resources from across the world of business and commerce for members, students and employers, including sections on CPD, learning and wellbeing.
The coronavirus pandemic has led to widespread job losses across most advanced economies, as governments have mandated ‘lockdowns’ in an effort to stop the spread of the disease. No country has managed to avoid rising unemployment. To cushion the blow, governments have pumped large amounts of money – several per cent of GDP – into labour market policies. The UK government, for example, is expected to spend over £80 billion (or 3.7% of annual GDP) on such policies over the next eight months. But the approaches taken have differed, and the policies chosen appear to have had important consequences for workers. Some countries have experienced large increases in unemployment, while others have sustained links between employers and employees, even though all have experienced large economic contractions. This is hugely important, both for assessing the effectiveness of policies so far and in thinking about the task ahead as governments attempt to release the lockdown restrictions and get their economies going. The paper compares the experiences of five countries that illustrate how different policy decisions have been associated with different labour market outcomes, setting up very different future challenges. Sunak also suggested that the scheme could be adjusted to allow employers to being that the employer would face the full cost of paying the employee for the hours they work, while the government would continue to subsidise any gap between those hours of work and the employee’s pre-coronavirus normal hours of work.26 This would provide more flexibility to firms.
However, the UK scheme would still not provide the sort of support provided by the schemes in operation in Australia, Canada, Ireland and the US for businesses (such as shops and restaurants) that may have to operate in a more labour-intensive way for some time to come in order to comply with social distancing rules. Those other countries’ schemes, which provide a fixed government subsidy, regardless of how many hours of work employees do, allow businesses to operate and employ staff without having to meet the full hourly wage costs. All of the wage subsidy schemes run the risk of hindering the normal process by which workers are reallocated from businesses with limited growth prospects to those that are growing more strongly. This is because all these wage subsidy schemes encourage employers to keep workers on their books rather than releasing them to go elsewhere – and employees may prefer the security of their current employer rather than risking taking a new job elsewhere, even if such an opportunity presents itself.
All five of these countries’ governments will need to think carefully about when and how to withdraw their wage subsidy programmes to support the proper functioning of the labour market. For countries where unemployment schemes are doing the heavy lifting of income support, the policy priority is to ensure that new jobs are created (or old jobs recreated) quickly as normal business resumes and to ensure that workers do not lose their skills or attachment to the labour market while they wait for this to happen. In Canada, Ireland and the US – where new coronavirus unemployment benefits are relatively generous – there will also be a tricky decision about when to scale those back to enable and encourage a return to normality. Not doing so risks low earners in particular being unwilling to return to work; doing so too quickly risks widespread economic hardship.