Editor's note: Harvard Business School in mid-October played host to the 2010 Workshop on Integrated Reporting: Frameworks and Action Plan. Under direction of conference organizer Robert G. Eccles, participants recently published an electronic book around themes developed at the workshop. The 334-page e-book, The Landscape of Integrated Reporting, can be downloaded in .pdf format from the link at the bottom of the story. Selected remarks to the group made by HBS Dean Nitin Nohria are reprinted here.
I am truly excited to have this opportunity to begin a conversation with all of you on the important topic of integrated reporting. As the dean of Harvard Business School, I find it a matter of great concern that society has lost so much trust in business. We live in a time in which business leaders are often trusted even less than politicians. It is something that I think each and every one of us should pay serious attention to.
I truly believe business contributes to the prosperity of humanity, and is more important to the continued prosperity of humanity than any other institution. Therefore, we must question what got us collectively to a place where society has lost that level of lost trust in business.
Whether it be the environment, health care, or making sure that people have access to information, I can't think of any major problem that society confronts today that can be effectively solved unless business plays an important part. And yet we find ourselves in a moment where this trust has been badly damaged. We've reached a place that feels like a vicious cycle, where nothing progressive is going to happen. Somehow, we have to turn this cycle in the other direction, and restore business to a place where it is experienced as an honorable calling, and a thing that can make great progress in society.
How can we get started down this path? One way is to introduce progressive ideas and practices that demonstrate to the world we care about more than profits. It's not that profits aren't important; no business survives without making profits. But that goal isn't incompatible with other societal priorities.
I think of integrated reporting as one of these progressive ideas and efforts that can begin to restore society's trust. If we start in various ways reporting back to society that we care, these reports can demonstrate we're as serious about holding ourselves accountable to and measuring our progress on a wide variety of things that matter most to people.
My understanding of the present state of integrated reporting is that many companies are producing reports, yet each is done in its own way without any clear sense of a top-down standard. This is a matter of concern to some, but I would argue that rather than be anxious about it, we should celebrate it and allow a lot of these ideas to bubble up. With some oversight form a coordinating body--of which I know there are a few that have been created now--we can begin to see a pattern and some best practices emerge, possibly inspiring others to take up the charge. Hopefully out of that bottoms-up process some standards will emerge more spontaneously than they would from the top-down.
What excites me so much about this idea is that it has yet to fully take hold. It's always important to be in the midst of emerging ideas and to provide support and momentum for ideas that are a little ahead of their time. By being at the leading edge of the movement, we can have real influence, bringing not just management thinking and theory but management practice and perspective.
This process might take some time, so I urge you to be patient with yourselves. This is not just for the sake of business that you're here, but also for the sake of society. I believe deeply that business is an engine for prosperity in society. Most of the challenges that society faces, business has to address. By taking on this integrated reporting initiative, business can show its commitment in that direction and in the process restore society's confidence and trust. Perhaps that will return us to a productive cycle in which business and society have a positive relationship.