Corporate Director tasks directors of boards on accountable reporting 

Prof. Mervyn King, Chair Emeritus, International Integrated Reporting Council (IIRC), has charged Directors of Boards on concise, accountable and understandable business reporting in line with sustainability standards for improved enterprise value creation.

King spoke at the Institute of Directors (IoD)’s  2021 Biennial Lecture with theme as : Enterprise Value Creation” which held on Thursday, virtually and physically in Lagos.

The Voice Media Trust (VMT NEWS) reports that the Biennial Lecture is a tradition by IoD Nigeria in honour of its outgoing President and Chairman of Council at the end of a two-year tenure.

According to the Chair Emeritus, reporting is the lifeblood of accountability and the board of any organization is the most informed body for accountability.

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To this, he stressed that the quality of the information of reports was a duty owed by directors.

He urged for a change of mindset at the board and senior management level and a symphony of resources and relationships.

Addressing the theme of the event, King said that the enterprise value of today would be achieved by embedding sustainable development goals into business models and recognising the impact of financial, social and environmental factors on the company.

He noted that for a more integrated reporting, enterprise value creation standards and pertinent sustainability standards have to be connected to the financial standards.

Also, Chief Chris Okunowo, President, IoD, said the event’s theme was to address critical issues of value that businesses need to deliver to its stakeholders, customers, and the society, particularly in these challenging times of COVID-19 and insecurity.

Okunowo noted that traditionally, enterprise value is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization.

He said that organizations seeking improved performance and value in terms of additional wealth and increased satisfaction for shareholders and customers tried to achieve this objective by employing different types of performance management systems.

“In order to approach business challenges and realities with more appropriate and realistic measures, a new management concept has emerged, termed: Value Creation.

“Value creation is a renewed approach to business management which pursues the creation of shareholder value through the delivery of value to customers and business associates.

“In taking these steps, which might include creating new supply chains, new products, new people policies, or even new standards of transparency in decision-making, organizations need to recognize that disruption and value creation are inextricably linked.

“And, although disruption is continually posing risks to corporate value, it’s also presenting new opportunities.’’

He said,“Long before COVID-19, companies whose strategies and assets were over-indexed on efficiency were struggling.

“Therefore, reconfiguring to compete successfully in the 21st century requires a business to flex and upgrade critical capabilities.

“Capabilities such as strategic direction-setting, resource allocation processes, and governance, which together enable the deployment and recalibration of operating assets.

“Stretching these same capabilities is also crucial for leaders if they are to make their companies more resilient and more purposeful contributors to society, thereby creating, or at least avoiding the destruction of, enterprise value,” he said.

Corporate Director tasks directors of boards on accountable reporting