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King Committee clarifies purpose of King III with regards to the Integrated Report

13 June 2014   (0 Comments)
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The King Committee has issued a King III practice note to clarify the different purposes of King III and the International <IR> Framework (issued in December 2013 by the International Integrated Reporting Council) with regards to the integrated report, and to provide guidance on reconciling the two documents.  

King III’s purpose in this regard sets out the principles relating to integrated reporting (i.e. the what), and is not meant to be prescriptive on the content or format of the integrated report. Whilst some elements of content and format were included in the King III recommendations, this was done at a time when there was no other guidance on the matter.

Subsequently, the International <IR> Framework was released with the purpose of establishing guiding principles and content elements that govern the content of an integrated report (i.e. the how to), thus providing additional clarity to the market in this regard.

In terms of the apply or explain approach of King III, if there is a view that a principle of King III is not being met by applying the International <IR> Framework, this must be explained in the integrated report.

The International <IR> Framework also allows for some flexibility in this regard in that it states that "If the report is required to include specified information beyond that required by this Framework, the report can still be considered an integrated report if that other information does not obscure the concise information required by this Framework”.  

Neither King III nor the International <IR> Framework advocates mindless application and the board should apply its collective judgement in the best interest of the company when considering the requirements of the International <IR> Framework and King III.


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