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CGF ARTICLES, OPINIONS & EDITORIALS

From dark ages to enlightened reporting (2012-05-08)

Modern day company reporting finds its roots as far back as 7500 BC, which is when we believe the first rudimentary form of accounting records and tokens may have been used to track certain business activities.

Of course, there are more accurate details of record keeping from 1000 AD onwards, when Italian merchants used more sophisticated forms of bookkeeping in response to their trade growth.  The double entry bookkeeping system found its way between the 1500 - 1700 era, as charted companies required improved records and systems when colonialism expanded.  But it wasn’t until the 1930’s when the US authorities started regulating accounting practices in response to the stock market crash and widespread fraud, that a true business reporting framework became evident.  It was only in the 1970’s when the concept of Corporate Social Reporting (CSR) was born, where companies were becoming more pressurised to consider their ‘dues’ to other stakeholders.

For centuries behind us, the privileged few who commanded empires and businesses, had the power to control information regarding their wealth and activities.  Consequently, they were able to prevent ordinary class citizens from participating in an economy in any meaningful, dare we say ‘fair’ way.  Fortunately times have changed this prehistoric and repugnant behaviour, which in almost all cases left people and the environment massively deprived -- even damaged -- through the greed of a few.

And so we have finally realised the critical importance and power of citizens acting in unison with all the role players as it relates to the supply chain of business, locally and internationally.  Through their collective performance, and the transparent relationships based on mutual trust, one is hopeful that the future of a company’s business and its strategy will greatly underpin, and preserve, long term value for all its stakeholders and ultimately the country at large.  This can only be achieved where companies fully subscribe to integrated reporting, which is -- according to the King III Code on Corporate Governance -- defined as “a holistic and integrated representation of the company’s performance in terms of both its finance and stability.”  Unlike years gone by, stakeholders are increasingly requiring in-depth information on companies in order to make informed decisions on the company’s true value, performance and sustainability, as they decide whether or not to support it.

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