‘NIRCO will increase transparency, accountability in corporate reporting’
The Nigerian Integrated Reporting Committee (NIRCO), has said the establishment of the committee will help Nigeria to develop an acceptable framework, increase transparency and accountability in corporate reporting, and make the country more attractive to foreign investors.
The committee has therefore implored regulatory authorities, firms, and institutes to support integrated reporting (IR) in the country, to provide disclosures on the connectivity of non-financial and financial value creation aspects of doing businesses.
Speaking with newsmen in Lagos, the Chairman of the Committee, Dr. Innocent Okwuosa, explained that NIRCO has been involved in awareness creation and advocacy campaigns for companies to inculcate the practice of integrated reporting, which will provide holistic information for investors to make investment decisions in Nigeria.
NIRCO, being promoted by the Institute of Chartered Accountants of Nigeria (ICAN), was inaugurated last year to serve as an influential committee that promotes the adoption of integrated reporting in Nigeria and the West Africa sub-region.
Okwuosa noted that reports posted by most companies quoted on the Nigerian Stock Exchange (NSE), have been found to be deficient, because they lacked vital financial and non-financial information, stressing that the current trend of integrated reporting worldwide calls for Nigerian companies to be proactive.
For him, there is a need to improve on Environment, Social, and Governance (ESG) disclosure practices by integrating the financial and ESG elements to generate a single integrated report, which allows both the company and its stakeholders, including investors to make better-informed decisions.
He said the Committee is set to train Nigerian professionals such as accountants, auditors and firms on how to prepare yearly-integrated reports as well as the likely benefits of implementing them.
“NIRCO is not a regulator, but a body which aims to create awareness and advocacy, and allow the regulators to talk to their industries on the need to adopt integrated reporting. One of the things that integrated reporting tries to do is to integrate sustainability reporting and financial reporting and make holistic information available at the foot of investors.”
Integrated reporting brings together material information about an organisation’s strategy, governance, performance, and prospects in a way that reflects the commercial, social, and environmental context within which it operates.
The concept of IR is a blend of two essential backgrounds of corporate disclosures; specifically, financial reporting and sustainability reporting.
With financial reporting, firms serve as a connection of the relationship amongst direct stakeholders whose primary responsibilities will include the maximization of shareholders wealth.
Sustainability reporting on the other hand, broadens the concept of IR, which is premised on the notion that the firm is a community made up of interdependent stakeholders bound together through a value-creation process, with a commitment to long-term equitable value creation.
To this end, the committee is also working on developing a roadmap and timeline for companies to adopt integrated reporting in their template, and the introduction of Integrated Reporting by the National University Commission (NUC), making it mandatory in the syllabus of ICAN for any future professional accountant.