We opened our 73rd annual International Conference in London this morning (July 7) with an inspiring video message from His Royal Highness the Prince of Wales. Certainly, a momentous occasion and a great start for our global audience.
A longtime supporter of environmental protection and sustainability, Prince Charles spoke to more than 2,300 conference attendees from around the world about his deep concerns over pollution, over-consumption, and other large-scale social and environmental problems.
He pointed out that these risks are often absent from board agendas or strategy-setting discussions, and noted that, as internal auditors, we "play a vital role in helping to shape the behavior of boards and others who are responsible for the governance of organizations and the management of risk." He encouraged internal auditors to play a vital role in making social and environmental issues a greater priority.
That's a tall order.
The good news is The Institute of Internal Auditors and many in our profession have already begun taking the necessary steps to meet his challenge head-on. In fact, just last year, sustainability was publicly declared a strategic priority for The IIA. Also in 2013, I was honored to accept an invitation on behalf of the Global IIA to join the International Integrated Reporting Council (IIRC), a global coalition working to promote an expanded model for corporate reporting. In the past year, the IIRC's framework for integrated reporting — corporate reporting inclusive of financial and nonfinancial "capitals" that affect longer-term value creation and sustainability — has been embraced by leading organizations around the world.
Companies traded on the Johannesburg Stock Exchange (JSE) are required to submit an integrated report on a comply-or-explain basis, thanks in large part to the efforts of internationally renowned Judge Professor Mervyn King, chairman of the IIRC. As well, holistic corporate reporting continues to evolve in other parts of the world. Internal auditors will be called upon to play a significant role in supporting integrated reporting and providing assurance on key elements that likely will include nonfinancial metrics. We also may be brought in to provide advice and recommendations to enhance the relevance and reliability of these reports.
In anticipation of these evolving roles for our profession, The IIA's Audit Executive Center released a report, "Integrated Reporting and the Emerging Role of Internal Auditing," as a resource to those who may be facing new and expanding responsibilities in this area. The report shares the experiences of the Clorox Co., one of the international organizations participating in the IIRC's Integrated Reporting Pilot Programme.
It's no wonder, then, that our 2014 International Conference includes a session on integrated reporting's value proposition and a conversation with Professor King himself. As well, there are a couple of concurrent sessions exploring the topic more deeply. And, going back to last year's International Conference in Orlando, Fla., we welcomed the IIRC's CEO, Paul Druckman, to the main stage.
I often mention how there are always new challenges and opportunities for internal auditors. Deciphering our role in the early stages of the global move to integrated reporting certainly falls into that category.
I'd love to hear your thoughts on this important subject.