The next step as more family and private firms move towards listing on stock exchanges across the Middle East and North Africa region, is likely to see companies encouraged to meet the new ‘integrated reporting’ practices which are being driven by international investors.
Adoption of the practice which sees companies providing annual reports which cover long-term strategy, business model and a broader concept of ‘value’ taking in to account external stakeholders, was the subject of a series of meetings in Dubai and Riyadh this week, during a visit from the Chief Executive of the International Integrated Reporting Council (IIRC).
CEO Richard Howitt was briefed about how integrated reporting can itself be integral for businesses to contribute to Vision 2030 in Saudi Arabia and Vision 2021 in UAE.
The IIRC is the 70-strong global body driving the introduction of integrated reporting worldwide, bringing together major international institutions including the World Bank, the World Economic Forum and the global association of financial market regulators, IOSCO.
In this week’s visit, Richard Howitt met companies, the accountancy profession and regulators to be briefed on growing interest in integrated reporting by businesses in the region, in a series of meetings co-hosted at the Dubai International Financial Centre and the Saudi Arabia Monetary Authority.
Gulf-based Aramex, the largest courier company in the Middle East, is a leading example of integrated reporting from within the region. With 1,600 companies globally undertaking integrated reporting, it is has already been adopted by stock exchanges including in Brazil, Japan, Singapore, Malaysia and South Africa.
In Dubai, Richard Howitt discussed how integrated reporting supports good corporate practices with the Hawkamah Institute and announced an online question-and-answer for local businesses on integrated reporting to be conducted jointly with the Middle East Investor Relations Association in the New Year.
In Riyadh, the Saudi Arabian Monetary Authority (SAMA) helped host discussions on how the banking sector can play a leading role in the adoption of integrated reporting in the Kingdom, both in better reporting of its own value-creation and by promoting it amongst business clients.
Richard Howitt said:
“Listed or pre-listed firms locally are coming forward because they recognise that integrated reporting can secure them easier access to finance, a lower cost of capital and can give them a better opportunity to compete with foreign firms.
“Companies already producing corporate social responsibility reports recognise the wider value they contribute to the world. Integrated reporting is the next step to help companies understand and manage how global trends are increasingly crucial to value-creation for the business itself, and which can be incorporated in a single rather than in multiple reports.
“For those in the Islamic Finance sector, integrated reporting can also be a particularly valuable tool.
“This is the new global benchmark being demanded by international investors and any company preparing or considering bringing forward an IPO, will want to consider adopting integrated reporting now.
“Not simply is integrated reporting the key to unlocking local and international capital markets for MENA business, but its increasing adoption will enable the whole region to benefit from international investment flows to meet its vision for the future.”