The governing body plays a central role in the organization’s value creation process. The decisions and actions taken by the governing body in directing the organization shape and determine its prospects and longer term viability.
Users of integrated reports need to make informed assessments about the quality of an organization’s governance. In assessing the quality of ethical and effective leadership they need to understand the governing body’s desired governance outcomes and how these are being achieved. They need to understand governance structure and processes and the level of informed oversight exercised by the governing body.
In exercising informed oversight the governing body should consider, at its meetings and as a matter of course, the value creation process from inputs to outcomes, including the quality of stakeholder relationships and the organization’s responses to those stakeholders’ needs, interests and expectations, the trade-offs among the capitals, and the management of risks, opportunities, technology and information. Such an approach allows for the better informed approval and monitoring of strategy and for strategic thinking on the organization’s outcomes. It facilitates the governing body’s ongoing and mindful focus on the organization having a positive effect on society and the environment and, as a result, can improve trust and confidence in the organization.
The disclosure of governance information in the integrated report should reflect the central role of the governing body in the organization’s value creation process in the short, medium and long term.