Not enough companies in the GCC are including corporate responsibility data in their financial reporting, lagging global best practices, warned industry experts yesterday.
“Rethinking corporate reporting will ensure that these sorts of issues do not occur,” said Imelda Dunlop, the executive director of Pearl Initiative, the not-for-profit organisation focused on raising levels of governance in the region. “Integrated reporting is not just about value creation, it is about assessment of risk as well,”
She was speaking on the sidelines of an event about corporate reporting organised between Pearl Initiative and the ACCA, the global body for professional accountants.
For years, finance professionals have been urging companies in the region to improve their reporting of financial data. But businesses are increasingly expected to marry the reporting of financial data with non-financial data covering corporate responsibility in company reports. Known as integrated reporting, the process folds in data on areas such as the staff gender ratio and charitable contributions with traditional data on revenue and spending.
Reporting on corporate responsibility had become a standard business practice among companies in Europe, the United States and South Africa, with 71 per cent of global companies publishing such data for 2012, according to a recent survey by KPMG, the professional services firm. But the survey found that only 20 of 100 companies surveyed in the UAE were following the same practice.
“I think that is a fair reflection of the GCC,” said Andrew Robinson, a partner at KPMG in Dubai. “It’s a bud and starting to grow, but at the moment it’s a very small representation.”
The ACCA is also urging companies to release forward-looking statements about strategy and aims in their reporting, rather than just historic data relating to the past financial period.
“Companies need to think about which reporting categories are relevant to them,” said Helen Brand, chief executive of ACCA. “For an oil and gas company, something like natural capital is absolutely fundamental, whether it’s in terms of the core input or the broader environment issues like greenhouse gases or spills.”
Fred Sicre, the managing director of Abraaj Group, the Dubai-based private equity company, said he saw a “strong propensity” among local companies to want to abide by international best standards in corporate governance.
“The GCC has globalised and therefore these trends and best practices can no longer be avoided,” he said.
tarnold@thenational.ae