The line 'Integrated Thinking' is amongst the latest fads in town, resoundingly on how it is improved by, but only tacitly on how it improves Integrated Reporting (IR). Instead of giving credit to contributions of the Strategic Management (and to an extent, the Management Accounting) field(s), it is being branded as the latest inventions of the international corporate reporting and governance community. Thought leaders have certainly become thought followers unbeknown, yet they are cashing in on it! 

JUST IN CASE YOU ARE NEW TO IR & INTEGRATED THINKING

The blueprint is the International Integrated Reporting Council (IIRC)'s 2013 IR Framework which says <IR> brings together material information about an organisation’s strategy, governance, performance and prospects in a way that reflects its commercial, social and environmental context.

It clarifies 'Integrated Thinking' as the active consideration of the relationships between the entity's operating and functional units and the capital it uses or affects, leading to integrated decision-making and actions with consideration for value creation over the short, medium and long term.

IR, THEN INTEGRATED THINKING OR THE OTHER WAY AROUND? 

Experts justify the birth of IR by pointing to, “Ocean Tomo’s Annual Study of Intangible Asset Market Value – 2010,” which revealed that in the 35 years to 2010, the proportion of intangible assets to total market value of S & P 500 companies grew astronomically from 17% to 80%; prompting a rush by the corporate reporting community to correct a major limitation we had long known about financial accounting and reporting -it is just too reactive and backward-looking in orientation!

In any event, given the way investor behaviour determines market values, surely it is a no brainer that this growth in intangible assets-to-market value largely reflected well-entrenched exante 'Integrated Thinking' practices long before? New to one does not mean new to most!

STRATEGIC MANAGEMENT & MANAGEMENT ACCOUNTING UNDERPINS 'INTEGRATED THINKING'

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