The Exchange: Integrated Reporting in the Public Sector

Event Details

DATE: November 17, 2014

TIME: 4:15 pm

Location:Washington DC, USA

2014-11 The EXCHANGE:

Governance Global Practice - Integrated Reporting in the Public Sector


Convening ​the ​world’s ​best ​thinkers ​on ​the ​new ​field ​of ​public ​sector ​integrated ​reporting ​
on ​Nov ​17th, 2014 ​from 0​9:00-17:30 ​at ​World ​Bank ​Headquarters, ​Washington, ​DC. 



Presented ​by ​The ​World ​Bank ​Group ​Governance ​Global ​Practice, along ​with: 
The ​IIRC, ​The ​UN ​Global ​Compact, ​and ​Said ​Business ​School ​at ​Oxford ​University 
Official ​Conference ​Partner: ​The ​Association ​of ​Chartered ​Certified ​Accountants ​(ACCA) 

Preliminary ​Conference ​Program: 
- Conference ​Welcome ​by ​the ​World ​Bank 
- Session ​1: ​The ​Public ​Sector ​Pioneer ​Network 
- Session ​2: ​Case ​Examples ​- ​Cities, ​Public ​Agencies, ​SOE’s, ​NGO’s 
- Session ​3: ​Unique ​Aspects ​of ​Public ​Sector ​ 
- Closing ​Plenary ​Session 

Breakfast, Lunch ​and ​refreshments ​will ​be ​provided. 

Your ​Conference ​Steering ​Committee: 
- ​Robert ​G. ​Eccles, ​Chairman ​- ​Professor ​of ​Management ​Practice, ​Harvard ​Business ​School 
- ​Timothy ​Youmans, ​Vice ​Chairman ​- ​Researcher, ​Harvard ​Business ​School 
- ​Paul ​Druckman ​- ​CEO, ​The ​International ​Integrated ​Reporting ​Council 
- ​Richard ​Barker ​- ​Professor ​of ​Accounting ​Said ​Business ​School, ​Oxford ​University 
- ​Ian ​Carruthers ​- ​Policy ​and ​Technical ​Director, ​Chartered ​Institute ​of ​Public ​Financial ​Accounting 
- ​Georg ​Kell ​- ​CEO, ​UN ​Global ​Compact 
- ​Hisham ​Waly ​- ​Practice ​Manager, ​Public ​Sector ​Performance ​& ​Public ​Resources ​Management, ​World ​Bank ​Group ​Governance ​Practice 
- ​V.Rama ​Krishnan ​- ​Financial ​Management ​Specialist, ​Public ​Sector ​Performance ​& ​Public ​Resources ​Management, ​World ​Bank ​Group ​Governance ​Practice 




Global Conference - Integrated Reporting in the Public Sector:

An Impetus to Introducing Integrated Thinking in Public Sector Management


World Bank, Washington D.C.,

November 17-18, 2014



Lead Financial Management Specialist


An Introduction to Integrated Reporting

There are growing expectations that organizations, both public and private, are responsible for more than the primary objectives for which they were created.  They must operate— and be perceived to operate— in a manner that is responsible, ethical, and sustainable, that minimizes negative impacts on the environment, that takes into consideration the varied needs of a spectrum of stakeholders, and that positively contributes to the communities in which they operate and the planet more generally. As sustainable value creation becomes the raison d’etre of organizations, they require a different perspective on how to report their performance and satisfy their accountability obligations, both regulatory and social, to their stakeholders. Traditional financial reporting, comprising financial statements and audit reports, is inadequate in dealing with this wider organizational agenda. This has resulted in the genesis of a movement toward integrated reporting, which is a more comprehensive model that combines traditional financial reporting with a broader set of reporting measures that include the environmental, social and governance aspects of an organization’s business. According to the International Integrated Reporting Committee (IIRC): “Integrated Reporting demonstrates the linkages between an organization’s strategy, governance and financial performance and the social, environmental and economic context within which it operates”. In other words, integrated reporting (IR) enables an organization and its stakeholders to forge clear linkages between the organization’s business and society’s goals of environmental and social sustainability. It enables stakeholders to assess clearly the ability of the organization to create and sustain value over the short, medium and long term. A key element of the integratedreporting approach is the reporting organization’s creation of ‘value’ through its use of a number of forms of ‘capital’— specifically, financial, manufactured, intellectual, human, social and relationship, and natural. Integrated reporting seeks to clarify the relationships between the six forms of capital, the organization’s business model, external factors and strategic thinking. IR provides a window to understanding how these forms of capital are used by the organization as well as how these forms of capital, business and society are impacted through the process of value creation. An earlier IIRC discussion paper entitled “Towards Integrated Reporting: Communicating Value in the 21st Century” (2011) highlights a number of areas where integrated reporting is expected to challenge current practices:

·         Thinking. Integrated Reporting supports thinking outside of bureaucratic silos and recognizes the complexity of an organization’s value creation process.

·         Stewardship, An Integrated Report provides information on an organization’s accountability not only for financial capital, but also for the other forms of ‘capital’ (manufactured, human, intellectual, natural and social).

·         Focus. An Integrated Report connects past performance and financial risks with an organization’s strategic objectives and its ability to create and sustain value in the future, thereby providing a more complete perspective.

·         Timeframe. - Integrated Reporting factors in short-, medium- and long-term considerations, avoiding an excessively short-term perspective.

·         Trust. Integrated Reporting emphasizes transparency, covering a broad range of issues and disclosing both positive and negative information.

·         Adaptive. Integrated Reporting promotes a principles-based approach with an emphasis on an organization’s ability to identify what is material to its particular sector and activities.

·         Concise. By focusing on only the most material information, Integrated Reporting aims to be concise, clear and readily understandable. The prospect is a more accessible report that clarifies key aspects and activities.

·         Technology Enabled. Integrated Reporting seeks to take advantage of new and emerging technologies to link information within the integrated report and to facilitate access to further detail online.


Why is IR important for organizations?

·         IR enables an organization to bridge bureaucratic/organizational silos within its operations to convey a more holistic picture of its governance, operational and financial performance, as well as the impact of its business on the surrounding environment and society.  The result is greater transparency about an organization’s performance and how it is being achieved, including social costs and benefits. As such, the quality of governance is enhanced.

·         IR provides an integrated set of performance metrics to an organization that result in internal “integrated thinking”, as well as full transparency in external reporting. It creates commitments to improve in the future, both through specific targets that are set, and from the feedback the organization receives from all of its stakeholders based on the information it is making available to them.[1]

·         IR leads to an enhanced flow of integrated information from an organization that, in turn, generates trust and fosters partnership between an organization and its stakeholders. The result is the facilitation of better stakeholder participation in the governance of the organization.

Why is Integrated Reporting relevant to the public sector?[2]

Current reports generally tell us little about how well a public service organization is equipped to meet future challenges, and how it will continue meeting its obligations in terms of delivering services and supporting communities. In addition, there is currently no requirement for a single published document which pulls together all of the various aspects of a public sector entity’s activities— or that interprets for users what all of the information currently reported by public service organizations means holistically. Furthermore, there is an extent to which public sector reporting frequently lives in the shadow of the budget. In the public sector, the budget is usually a public document setting out the organization's plans for the provision of services and/or regulatory activities and their funding. In many parts of the world, it is the subject of extensive and sometimes heated public debate, often including the consideration of alternative plans and proposals put forward by political parties in opposition. The adoption of integrated reporting may provide a way of increasing interest and engagement in other aspects of reporting beyond the budget. The recent work of the International Public Sector Accounting Standards Board (IPSASB) regarding its Conceptual Framework, long-term fiscal sustainability of projects, and reporting service performance reinforces the view that general purpose financial statements cannot satisfy all the needs of users in assessing the efficiency and effectiveness and future viability of programs in providing social benefits.[3] Furthermore, the International Federation of Accountants (IFAC) Sustainability Framework identifies a key role for the accountancy profession in challenging conventional assumptions, integrating sustainability issues, redefining success, establishing appropriate performance goals and targets and ensuring that necessary information, analysis and insights are available to support decision-making. Integrated reporting provides a way for public service organizations to enhance their strategic planning and consider the long-term fiscal, social and environmental sustainability of the organization. Organizations need to understand likely future drivers and risks, and identify their options in order to be equipped to respond to and manage change.  Integrated reporting also offers an opportunity to consider and review the interconnectedness of complex multi-service delivery. It also offers the chance to clarify goals and identify preferred outcomes within the wider context of promoting public well-being. The question of the level of applied integrated reporting is of relevance here. Should integrated reporting focus on those government bodies engaged in shaping policy and service choices rather than on the individual entities (internal or external) commissioned to deliver specific services for specific periods? If this is the case, then perhaps integrated reporting has firstly to be embraced at the whole-of-government level, and then taken to the entity level through the various intermediate levels of government. Public bodies already disclose a great deal of information and produce a multitude of reports for various service areas and activities. Integrated reporting can draw on this material and the expertise already developed by public service organizations. It has the potential to provide a way for citizens and other users of public entity reports to look to a single place where a more complete and holistic picture of the organization and its performance across a range of dimensions can be accessed. Key to this approach is providing transparent information which is contextualized as opposed to simply providing data without the appropriate context. The objectives of public sector organizations are clearly different from investor-owned business objectives. As noted with respect to IPSASB’s work, there is already recognition in the accounting profession of differences between the public and private sectors. There is also recognition of differences in non-financial reporting. The Global Reporting Initiative (GRI) which produces sustainability reporting guidelines, for example, has also produced a sector supplement for public agencies which seeks to address aspects of public service. What needs further discussion, however, is which differences matter in relation to applying integrated reporting and to what extent these differences affect the scope and structure of integrated reporting in public service organizations. The recognition of the issues relating to the application of IR in the public sector convinced the Governance Global Practice of the World Bank to join hands with the International Integrated Reporting Council (IIRC) and organize a Global Conference on “Integrated Reporting in the Public Sector” on November 17-18, 2014 at the World Bank Headquarters in Washington DC.

Global Conference on IR

The Conference on Integrated Reporting for the Public Sector organized by the MENA Governance Global Practice (GGP) team helped to bring together several stakeholders interested in increasing the acceptance and application of IR in the public sector. The inaugural Integrated Reporting in the Public Sector Conference was conducted in partnership with the Association of Chartered Certified Accountants (ACCA), and supported by the International Integrated Reporting Council (IIRC), the Said Business School at Oxford University, and the United Nations Global Compact (UNGC), with additional support from the American Institute of Certified Public Accountants (AICPA). Professor Robert Eccles of the Harvard Business School along with Samia Msadek, Director of Public Resources Mobilization and Management, Governance Global Practice, and Hisham Waly, Practice Manager, Governance Global Practice for the MENA region at the World Bank, led the discussions.  In the same way that integrated reporting is catalyzing integrated thinking for private sector companies, this conference, which combined formal presentations with interactive engagement from conference participants, sought to introduce World Bank staff to key IR concepts. Further, it sought to increase awareness in the public sector about how IR can be used to support integrated thinking to improve the performance of government agencies, cities and non-governmental organizations (NGOs). This conference also served as the official launch of the IIRC’s Public Sector Pioneer Network. 

Summary of the main discussion themes

1. Intergenerational equity and stewardship: Cities and other public sector organizations create value by their ability to sustain institutions and infrastructure to support present and future human activity. These organizations struggle to find how best to account for future generations’ needs. As highlighted by David Walker[4], “Don’t tax you, don’t tax me, tax the baby on your knee” is a commonly heard phrase touted as a politically expedient solution to public finance dilemmas. However, what happens when we are making decisions for generations that do not yet exist, or for “trees without voices?” Who ensures that the environment, the social fabric or public institutions are not destroyed for children yet to be born? As Judge Mervyn King emphasized, we have to be advocates for future generations.[5] This foundational principle of IR was voiced across all sessions. Though intergenerational equity is germane to the private sector, it is much more important for the public sector. By definition, governments exist for the long-term: they have the right to tax, and their services are provided well into the future.  As such, are policies they pursue sustainable?  The question remains as to how public sector leaders make and address an audience for the forms of capital that do not exist at the time these decisions are being made. Structuring the answer to this question goes to the essence of intergenerational stewardship.

2. Leadership and adoption: Many public sector entities express interest in IR, but few want to make the first move. Unlike the private sector, there are few pioneering examples in the public sector. Everyone wants to be a leader, but no one wants to go first. How, then, do we get the IR ball rolling? Solving this conundrum is the aim of the IIRC’s Public Sector Pioneer Network. Fayez Choudhury[6] suggested that “you have to talk quantity, not just quality. One or two high-quality outcomes are not as good as a large number of medium-quality outcomes progressing in the right direction.” Conversely, Samia Msadek[7] stressed “the Power of One.” With one or two notable examples, people can point to best practice cases that can fuel future expansion of IR in the public sector. David Walker commented that we have to move on multiple fronts, with both early adopters from countries that are forward-looking and have a plan, as well as visionary champions in countries that represent greater challenges. IR can help make the case to citizens of a country that their interests, and those of future citizens, are being recognized and addressed.  Countries such as Austria and Canada have legislation that forces public officials to adopt a long-range viewpoint. Panelists and participants suggested the following approaches to help IR gain traction in the public sector:

·         Implement a comprehensive communication strategy and identify early adopters;

·         It is easier to apply the concept of IR in public sector service “businesses”,  for example, in transport systems and healthcare, because there are many non-financial metrics one can use to assess success and comparability;

·         The World Bank  could take the lead  in introducing countries to the concept and practice of IR and  initiate work with potential countries and public sector entities interested in putting IR into practice; and

·         The need for an “IR-light” standard (that is, a standard which may have reduced complexity and offer an easier basis for IR implementation) was expressed by George Kyriacou and echoed by many.

3. Links to the “six forms of capital”[8] value creation: World Bank Lead Economist, Carter Brandon, noted that the macro-economic system of national accounts does not currently reconcile (clearly) with the IIRC’s six forms of capital, in that some of them  are left out of the national accounts standard categorization, or assumed to be under other accounts. He also presented one possible solution[9] and highlighted the fact that there is no agreement on the assumptions used in his example. There was much discussion across the sessions questioning the reporting boundaries for the entity (nation, city, agency, and state-owned enterprise [SOE]) in the public sector. As public financial reporting is a key component of IR and financial sustainability is core to sustainable development, then many institutions (including central banks, the International Monetary Fund [IMF], the World Bank, the United Nations Development Programme [UNDP], and others) all have a vested interest in working to standardize the reconciliation between the system of national accounts and the six forms of capital for integrated reporting.

4. Accountability and incentives in the public sector: Material nonfinancial value creation activities are not being accounted for in the management of cities and other public sector entities. It is unclear who is accountable at large, nor is it clear how to hold public sector managers accountable. Incentivizing people in the public sector may be possible by aligning newly transparent non-financial measures and standards with personal performance and growth opportunities for public officials. Public sector entities — and in particular public officials — have to take a long-term view with no defined limit since they need to think about all future generations to come. For example, if a city builds a road by hiring private sector companies, it is that city’s responsibility to maintain the road for an indefinite period of time. While companies cannot succeed in a society that fails, where specifically does a private entity’s accountability end and public sector accountability begin? What can IR do to clarify these accountability roles, and thus help align the accountability of public sector managers? How does one incentivize people in public sector compensation systems that are overwhelmingly seniority-based, and with limited financial performance incentives? David Wood suggested that there are many non-financial, career-building and intangible ways that public sector management behavior can be incentivized and aligned. For a public sector materiality determination process to be successful, and for that matter for IR to help governments realize their intergenerational sustainability potential, it was suggested that one needs:

-          Properly designed incentives to encourage people to do the right thing

-          Transparency that they do the right thing

-          Accountability if they do not do the right thing.

5. Materiality and public sector governance analogs: Due to the diffuse nature of power in the public sector as compared with company governance structures, it is unclear who has decision-making authority regarding the determination of material issues, a foundational component of IR. Materiality is owned by the board in corporations. How should we view it in the public sector and who is responsible for defining it? What does it mean in the public context? In order to think about this, we need to identify the audiences of public sector IR. Broadly speaking, it is civil society. However, pragmatically speaking, is it the legislature? Is it the electorate at large? Furthermore, some believe that companies must reach a certain point at which senior management is speaking in an integrated thought manner before they can promote IR outside of the firm. Some questioned how one would— or if it is even possible to— identify this “diffuse or cohesive” readiness stage in the public sector. Some cited the case of the American executive and legislative branches’ recent tradition of non-cooperation as an example of non-readiness.  Should IR adoption in the public sector be slowed to require greater consensus before proceeding? Who in government should be demonstrating integrated thinking and to whom? Shareholders can drive change in the private sector, but a government will not be voted out of office because they do not perform integrated reporting, nor will IR be the deciding factor in how one votes. (“If Detroit goes bankrupt, it won’t cease to exist… unlike a company after corporate bankruptcy.” - Stephanie Fox[10]). Helle Bank Jorgensen[11] observed that IR helps companies stay accountable to stakeholders, suggesting that a way needs to be developed to make the link more apparent between society and “society as represented by public sector organizations and institutions.” For many years, reporting has played a role in keeping companies accountable for how they manage their finances, but not for how they manage their resources. In the private sector, financial reporting is largely effective at performing the function for which it was designed— namely, giving shareholders the information they need to make decisions. Furthermore, the essential although elusive concept of materiality is a key aspect of financial reporting, so it makes sense to move this concept into integrated reporting. In the public sector, financial reporting in many polities is shaky at best, as was highlighted by the references in presentations and discussion that many nations have yet to move from cash to accrual accounting. This is a huge barrier to the adoption of IR by the public sector. Where does integrated reporting enter the picture?  Is there room for IR, or even “IR-light”, in governments where financial reporting does not meet generally accepted principles and practices? Materiality is hardly even discussed in public sector reporting.

6. What is the value of IR for a city? Although significant research must be done to adopt integrated reporting in the public sector context, Glenelg Partners’ Public Sector IR Phase I report notes that cities provide a promising starting point for the integration of these themes.  How public sector officials define future value in a city (rather than accounting for the past) is another great challenge. How does city value creation align with the six forms of capital? Growth creates more jobs. Whereas economic growth involves fiscal policy, regulatory policy, trade, immigration, education, energy, and environmental policy, we have a tendency not to see these issues as an integrated whole.  Even though the UN Development Programme, for example, publishes detailed sustainability information, it would still require, as George Kyriacou[12] said, tools to elevate the conversation to the level of strategic matters that impact the organization. Mitzi Wyman[13] gave several examples of how such integrated thinking is critical to a public sector organization’s ability to elevate the value conversation to the strategic level. How can IR help to clarify who helps create, or destroy, value in a city or public sector organization? Answering these strategic, audience-dependent questions requires public sector governance officials to pass judgment on materiality. The impacts of one part or constituency of the city on another are not evident because, many times, city government-stakeholder connections are weak or indirect. Although IR can help clarify or solve this connectivity challenge, we have to think about future value by giving the public sector a framework — a plan and performance metrics — to measure the answers to strategic questions about these complex systems. Accounting metrics are indicators of value, but not full indicators because, besides measuring only past activity, they do not capture an entity’s use of and impact on all six forms of capital. Here too, IR can play a key role. However cities create, sustain, or destroy value, they do so in a space directly adjacent to their stakeholders. It is this close physical and social proximity that provides the greatest opportunity for IR to empower value creation for future generations of citizen stakeholders. IR offers the opportunity to create an engagement space where it is possible to see the options “in the round” and involve more stakeholders in the decision-making process, thus reflecting a wider thought spectrum. IR brings many positive benefits to the effective management and engagement in cities, particularly through: (i) a focus on value creation; (ii) lateral integration of the six forms of capital, beyond simply financial capital; and (iii) long-term planning beyond current short-term budget processes.

During the discussions, it was repeatedly emphasized that the integrated thinking to improve the performance of public sector organizations that arises from the IR process is of greater significance than the IR itself. In this context, the IR framework needs to be customized to meet the unique characteristics and challenges of the public sector. The discussants agreed that IR can have immediate applicability to public sector organizations, such as SOEs and cities. The conference saw the launch of the IIRC’s Public Sector Pioneer Network  for sharing knowledge and experience among all stakeholders. Though the conference discussions brought out the various facets of IR relevant to the public sector, it was also evident that much more needs to be done to adapt the IR principles and framework to a public sector context. Although there were some participants who suggested that there should be an “IR light” for the public sector, the majority of the participants were of the opinion that since the IIRC framework is “principles based”, there is no need to dilute the framework to suit the public sector. Instead, what is required is to help public sector entities adapt the framework into their organizational systems by providing suitable guidance and technical support. Discussions during the conference made it clear that there is not much expertise in this area outside that of the World Bank.  Therefore, it falls within the Bank’s role to take the leadership role in applying IR to the public sector.

Why should the World Bank and the GGP be involved in IR?

IR fits well with the mission of the World Bank for the following reasons:

·         Integrated Reporting provides a great opportunity for the World Bank to actualize its stated intentions of fostering an integrated approach to governance. Creating and sustaining strong institutions and institutional practices for governance are key pieces of the World Bank’s strategy for achieving its twin goals of ending extreme poverty and boosting shared prosperity. With its mandate to foster the development of innovative integrated solutions to institutional problems, the GGP supports the setting up of global standards and practices that help strengthen the institutional frameworks for good governance. The GGP’s support to IR will fill a crucial gap currently in the sphere of public and private sector accountability systems arising from gaps in the traditional forms of financial reporting.

·         The GGP can bring a unique value proposition to the existing institutional realm of IR by providing thought leadership on the application of IR to the public sector. Though the pace of developing the concept and applications of IR in the private sector has been quick, there is a clear void in developing the applications of IR to the public sector. The GGP can provide thought leadership in areas such the application of IR to how national and sub-national governments and SOEs report their performance. This presents a unique opportunity for the GGP and the Bank to take the leadership in the creation of a global public good and help client Governments to take an integrated and holistic approach to public sector issues.

·         IR provides a valuable instrument for the GGP to help build cross-cutting solution approaches among global practices. Several global practices such as Urban, Water, and Energy as well as cross-cutting solution areas, such as Climate Change, are already seeing the emergence of crucial common areas of interface with the GGP as well as among themselves. Realizing and expressing these crossing-cutting areas is critical for achieving the realization of the Bank’s twin goals. IR presents a very useful instrument in identifying and expressing the synergies among the various practices. Indeed, this presents an opportunity for the GGP to work across global practices in the design and implementation of integrated solution approaches to development problems.

·         IR presents a viable instrument for the GGP to bring integrated approaches to country development strategies. The GGP can utilize IR as an instrument to support the Bank’s country engagements both at the policy and operational levels.  It can be used to bring about integrated approaches to address the unique and country-specific development priorities and challenges.  For example, in the MENA region, where the Bank’s strategy is driven by the goals of growth and jobs, embedding the principles of IR into economic policies as well as into reporting regimes will help ensure that the principles of sustainability and participation will be firmly embedded into the country governance frameworks. Countries such as Morocco are already investing in the creation of “green economies” that would require organizations to adopt reporting frameworks that are holistic— and that emphasize the impact achieved in the realization of the sustainable development agenda. In high-income countries such as the Qatar, Saudi Arabia and the United Arab Emirates, where economic growth is driven by resource revenues, the use of IR can result in embedding sustainability principles into country economic policy regimes. It could also foster dialogue and discussion among stakeholders on long-term growth strategies. Outside the region, in countries such as China and India where SOEs play a significant role in the economy, IR represents a significant opportunity for the GGP to contribute to the strengthening of transparency and accountability across sectors.

·         With sustainable development becoming a key driver of public policy globally, the GGP will need to develop instruments and strengthen the sustainable governance agenda within and outside of the Bank. The anticipated ratification of the United Nation’s “Sustainable Development Goals” in the autumn of 2015 as well as the increasing acceptance of the UN Global Compact’s LEAD Program in the corporate sector globally, will result in increasing demands for strengthening the governance and institutional framework relating to the implementation of sustainable development policies and programs. Development of the concepts and application of IR offers the opportunity to the GGP (and the Bank) to take the lead to develop suitable instruments and practices that can shape the design of a sustainable governance theme within the sustainable development movement. 

Strengthening IR in the public sector: issues and challenges: Even though the concept of IR seems intuitively a good fit for the public sector, the discussions during the Conference confirmed that there is very little knowledge and experience in applying the concept of IR to the public sector. Even those delegates at the conference representing public sector organizations in developed countries such as the United Kingdom (UK) and the United States (US), stated that these efforts are still a work in progress. At the same time, several developing countries are already moving forward in areas such as sustainability reporting through organizations (such as the “Friends of Paragraph 47”) that came about as a follow up to the Rio+20 conference held at Brazil in 2012. When this is taken together with the growing acceptance of the International Public Sector Accounting Standards (IPSAS) by governments across the world, it is safe to surmise that that there is a constituency in the global public sector that would welcome the introduction of IR, as it would bring together both these strands of reporting and help to present an integrated picture of the organization.

However, as brought out in the conference discussions, there exists a critical knowledge and experience gap in applying the IIRC’s IR framework to the public sector that needs to be addressed immediately. This requires the development of technical notes, practical guidance and other knowledge material that are based on a first hand understanding of the public sector, as well as research on adapting the principles of IR to the public sector. This needs to be done on a priority basis as otherwise the interest generated in the concept of IR among public sector entities, especially in the developing countries, may dissipate for want of implementation guidance. Therefore, based on the discussions, the GGP can take the lead in setting the stage for the implementation of IR in the public sector in partnership with other key stakeholders such as the IIRC, the Chartered Institute of Public Finance and Accountancy (CIPFA), the International Fund for Agricultural Development (IFAD) and academic institutions, such as Harvard Business School and Said Business School (Oxford University). 

Furthering the implementation of IR in the public sector— next steps: Based on the discussions regarding the application of IR to the public sector, Hisham Waly (Practice Manager GGP MENA) outlined a broad framework comprised of twelve action areas that sets the stage for the next steps to further the efforts to apply IR to the public sector. The twelve action areas also provide a road-map for the GGP’s lead role in strengthening the engagement of the Bank engagement in IR from the perspective of our clients in the public sector. The twelve action areas are: 

1.        Raise Awareness of IR in the World Bank Group (WBG) and countries; make it a part of discussions relating to strategy and policy, such as the Country Partnership Framework Discussions and Systematic Country Diagnostics.

2.        Develop a convincing and evidence-based answer to the following questions: Why does IR matter to the public sector?  How can IR support the WBG’s twin goals of ending extreme poverty and boosting shared prosperity?

3.        Manage perceptions about IR in the WBG and client countries.

4.        Strengthen capacity of client counterparts (such as the Ministry of Finance, Professional Accountancy Organizations, Corporate Governance Advocacy Groups, and so on).

5.        Identify opportunities to support the implementation of IR (that is, launch pilots to promote IR and learn from them to refine concepts and approach.

6.        Invest in IR-related research and analytical work to help develop an approach to implement IR in general and in WBG-funded projects, such as Investment Lending and Program for Results (PforR) operations, in particular.

7.        Identify barriers to the implementation of IR in the public sector.

8.        Find allies to help promote and create demand for IR in the public sector through communication, knowledge dissemination and advocacy with key stakeholders such as civil society organizations (CSOs), Parliamentary bodies, Supreme Audit Institutions, and so on.

9.        Prioritize to ensure that the Bank does not overwhelm its clients.

10.     Engage with other Global Practices (such as Social, Urban, Rural and Resilience, Water, and Environment and others) as well as Controllers in the WBG to promote “integrated development.”

11.     Coordinate with key players in the IR area, such as the IIRC, IFAC, CIPFA and donors.

12.     Establish a Community of Practice (CoP) for IR.

Based on these action areas, the GGP in MENA has taken the initiative to form a CoP with the aim of bringing together the various constituents within the Bank who are interested in furthering the practice of IR. The CoP is also preparing a list of key action steps to build knowledge and awareness of IR within the Bank, as well as in client countries. Further, it will seek to pilot the implementation of IR in selected countries as well as, to the extent possible, in Bank operations.


[1] Adapted from “One Report: Integrated Reporting for a Sustainable Strategy,” by Robert G. Eccles and Michael P. Krzus (2010).

[2] “Integrated Reporting and Public Sector Organizations – Issues for Consideration.” (CIPFA,2013)

[3] IPSASB (2011) ED46 Recommended Practice Guideline, Reporting on the long term sustainability of public finances. Available at: and Consultation Paper (2011), Reporting service performance. Available at:  IFAC (2011) Sustainability framework 2.0. Available at:


[4] Former Comptroller General of the United States.

[5] “If our response to the crisis focuses only on the symptoms rather than the underlying causes of the crisis, then we shall bequeath to future generations a serious risk of another crisis even worse than the one we have experienced.” Speech to the Scottish Business Organisations in Edinburgh, October 20, 2009.

[6] CEO, IFAC.

[7] Director, Public Resource Mobilization and Management, Governance Global Practice, World Bank Group.

[8] Per the IIRC: financial capital, manufactured capital, intellectual capital, social and relationship capital, human capital, natural capital.

[9] Cater Brandon presented the “change in total wealth per capita model”, as a macroeconomic indicator of sustainability. “In valuing the change in total wealth per capita, wealth is defined as physical + financial + natural + human forms of capital ... Key question: Are we saving enough [of these capitals] for the future?” We note that five macro-economic capitals were accounted for, with the IIRC’s sixth capital, manufactured capital, assumed to be part(s) or the other five capitals in the “change in total wealth per capita model.”

[10] Technical Director, IPSASB.

[11] CEO of B. Accountability.

[12] Deputy Director, Finance and Budget Management, Office of Financial Resources Management, Bureau of Management, United Nations Development Programme

[13] Leadership Development Specialist, London Leadership Academy, National Health Service