If you want to develop genuine integrated thinking, consider your institution’s purpose first.
Investors, employees, society and other stakeholders are increasingly expecting organisations to have a societal purpose beyond profit.
It is becoming overwhelmingly apparent that a clear purpose is crucial for building trust with important stakeholders. Similarly, at a higher education level, the importance of aligning an institutional purpose, strategy and values in order to achieve long-term success is increasingly being recognised.
A well-defined purpose can help a higher education institution to focus on the value created for its stakeholders and is a necessary step on the path to integrated thinking. In our view, purpose is an organisation’s fundamental reason for being – ‘what it does every day to create value for its stakeholders’.
There is research by Advance HE that contends that much of the value created by universities is not made visible through current reporting and ranking mechanisms.
What can be done?
We know that value created can be difficult to identify and measure, but in our experience we have seen integrated thinking and reporting being used as a tool to help tell an organisation’s story in a meaningful way for stakeholders. This approach applies equally to those in higher education.
Integrated reporting can help meet the challenge of greater transparency and accountability by providing key stakeholders with a broader view of an organisation's activities and how they contribute to the greater good of society. There is a significant opportunity to improve levels of engagement and understanding by getting better about communicating and doing as much as one can to provide information that students and other stakeholders wish to see.
This in turn can help to cut through the complexity the sector faces and enhance the external perception of how higher education institutions operate, as well as the value they create for different stakeholder groups.
Integrated reporting also helps to promote deeper and more engaged discussions about KPIs; challenge assumptions about business models and strategies and widen views around measures of performance, outputs and outcomes. Embarking on such an approach can help the broader academic community to understand and adapt their own value creation process as well as connect to and own their overall vision and strategy, as well as that of the sector.
By considering the content elements, guiding principles and six capitals of the IIRC’s Integrated Reporting Framework, an organisation is urged to consider all sources of value and how they contribute to value creation and meeting their purpose.
This means focusing on some advantages and trade-offs in existing approaches, plus all the capitals – both financial and non-financial, which are needed in the institution or companies’ value creation process. These deep dives lead to considerations of improvements and mitigation of challenges in fulfilling the organisation’s purpose. Much like the process of materiality within integrated thinking, continuous interrogation of integrated thinking practice leads to better results over time such as:
- important breakthroughs in understanding and articulation of how they create (and destroy) value, leading to better decision-making.
- better ways of assessing performance and changes in the provisions of information.
- better understanding of risks and opportunities, and last but certainly not least, better collaborative thinking by the board about goals and targets.
At Black Sun, we have long been passionate believers that communicating with your stakeholders clearly and transparently is critical to building and maintaining trust.
In our own experience, we have found that organisations who commit to an integrated reporting journey reflect the positives that already exist within the business or institution more effectively – namely good management, strategic and forward thinking and a well-run organisation.
Our research, Purpose and Profit evidences similar thinking in c-suite corporates, although it also evidences a need for further business commitment to extract the value of the process.
Sallie Pilot is Director of Insight and Engagement at Black Sun, providing the strategic direction of Black Sun’s industry leading research and thought leadership programme. She is a globally recognised commentator on ‘integrated thinking’, corporate reporting trends and best practice stakeholder communications. Having partnered with the IIRC almost since its inception, supporting the organisation to develop their own integrated report, Sallie is well versed in the benefits of application, seen through more than 20 years’ experience in corporate communications consultancy. This includes clients such as Coca-Cola Hellenic, DBS, HSBC, Kingfisher, Olam, Tesco, Recruit Holdings and World Bank. Sallie is a Board member and Chair within the functions of numerous industry bodies, such as the UK Investor Relations Society, the Prince's Accounting for Sustainability (A4S), FRC and ACCA.
Visit www.blacksunplc.com to see more of our research and learn about how we help corporates to articulate their value creation stories.
Let's Talk Value Conference 2020 will look at continuing the dialogue about value and looking through the lens of integrated thinking and reporting – join us on 11 February in London.