Chapter 9 ‘- Integrated Reporting and Disclosure

Integrated Reporting and Disclosure


The King III recommendations on Integrated reporting and Disclosure do not appear to have been dealt with as comprehensively as the other 8 chapters.

Most of the required content is not stipulated in detail, with the governance reporting requirements being scattered within the other chapters.

The primary objective of this chapter is the integration of the financial information with other company information for disclosure purposes.




This chapter consists of only 3 principles and they are difficult to interpret without the context provided by the code’s recommended practices and the report:

  1. It is the board’s responsibility to “ensure the integrity” of the integrated report.
  2. The financial report should be “integrated” with “sustainability reporting and disclosure”.
  3. The sustainability reporting and disclosure should be “independently assured”.


Integrating the financial with the sustainability report


> Publishing

King III notes that the Integrated Report can be made up of more than one document, but, if it is more than one document, all the associated documents “should be made available at the same time and disclosed as an integrated report”.

The integrated report should be published annually.


> Approach

King III notes that the report’s emphasis should be on “substance over form” –  integration should not merely be a “copy and paste” from source documents.

The information should be:

complete, timely, relevant, accurate, honest and accessible and comparable with past performance of the company

The report should also contain “forward-looking information”.


> Context

The Integrated Report is used to document the company’s performance with respect to “economic, social and environmental issues” – the Report’s introduction can be used to provide this context.

King III notes that this should reflect the choices made in the strategic decisions adopted by the board in the triple context of economic, social and environmental issues – the goals and strategies and all areas of performance of the company.

The context should also provide information regarding the company’s operations and plans to improve the positives and address the negatives.

In summary, the context should describe “how the company has made its money” such that together with the details in the report, a reader is able “to make an informed assessment of the economic value and sustainability of the company”.


> Financial

King III notes that the company’s Annual Financial Statements should be included in the integrated report.

Disclosure of the company is a going concern status must be made, and whether it will continue to be a going concern in the financial year ahead. If there is concern in this regard, then the associated activities must be detailed.

Notes on the company‘s financial results should be presented in such a way to enable a reader “to make an informed assessment of the company‘s economic value”.


> Sustainability

King III notes that Sustainability reporting has become more formalised and mentions:

The Global Reporting Initiative (GRI) G3 guidelines;
Global Reporting Initiative




The ISO standard (ISO 26000) for social responsibility; and




The JSE Socially Responsible Investment (SRI) Index.

  Johannesburg Stock Exchange



King III notes that “the principle of transparency in reporting sustainability information is a critical element of effective reporting”.


Sustainability reporting cannot be a matter of collating information and reporting at year end, but should be integrated with other aspects of the business process and managed throughout the year. King III


> Governance

Throughout King III, mention is made of key governance information which should be disclosed in the Integrated Report.

This includes commentary regarding:

+ The appointment of a chairman, who is not independent;

+ The assessment of the independence of the independent non-executive directors;

+ The director performance evaluation process, results and action plans;

+ Board sub-committee constitution, composition and charters;

+ The adoption of the holding company’s policies by the subsidiary companies;

+ The Remuneration Report;

+ The results of the finance function review by the Audit Committee;

+ The Audit Committee’s role, its composition, number of meetings and activities undertaken;

+ The effectiveness of the company’s risk management system and processes;

+ Any “undue, unexpected or unusual risks” faced by the company in the past year;

+ The establishment of the compliance framework and processes;

+ Material or often repeated instances of non-compliance by either the company or its directors in their capacity as such;

+ The nature of the company’s dealings with stakeholders and the outcomes of these dealings;

+ The number and reasons for refusals of requests of information that were lodged with the company in terms of the Promotion of Access to Information Act, 2000 (PROATIA).


The Integrity of the Integrated Report


King III recommends that the board should ensure that the company has implemented:

+ A structure of review and authorisation designed to ensure the truthful and factual presentation of the company‘s financial position”; and

+ Controls to enable the company to “verify and safeguard the integrity of its integrated report”.


Independent Assurance


King III notes that “the board should be responsible for the accuracy and completeness of the sustainability reporting and disclosure but may rely on the opinion of a credible, independent assurance provider.”


King III recommends that the board delegates to the Audit Committee the responsibilities to:

+ Provide general oversight and reporting disclosure;

+ Evaluate sustainability disclosures;

+ Ensure “that the information is reliable and that no conflicts or differences arise when compared to the financial results”;

+ Recommend independent assurance providers to the board; and to

+ Obtain assurance over the financial disclosure in the integrated report.


It is important then that the board directs the Audit Committee in the scope and rigour of the assurance engagement it requires.


King III notes two complementary sustainability assurance standards and recommends that both methodologies are used in combination.

  1. AccountAbility‘s AA 1000 Assurance Standard (AA1000AS) and
  2. The International Accounting and Auditing Standard Board‘s International Standard on Assurance Engagements (ISAE 3000).


Disclosure of this assurance should be made in the Integrated Report:

+ The name of the assurance provider.

+ The scope and methodologies used.

+ The period under review.


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NOTE: The comments in this page are to be read within the context of the candor legal notices which can be found at this web siteThe Institute of Directors in Southern Africa’s ownership of the copyright in the publications “The King Report on Corporate Governance for South Africa (The Institute of Directors in Southern Africa) September 2009” and “The King Code on Corporate Governance for South Africa (The Institute of Directors in Southern Africa) September 2009”  is hereby acknowledged.