| Published: | November 19, 2010 |
| Author: | Nitin Nohria |
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. Remarks to the group made by HBS Dean Nitin Nohria are reprinted here.
I'm truly excited to have this opportunity to begin a conversation with you on the topic of integrated reporting. The entry point to this conversation for me has been that, as dean of Harvard Business School, it's a matter of great concern to me that society has lost so much trust in business. It's something that I think each and every one of us needs to pay great and serious attention to. We live in a time in which business leaders are often trusted even less than politicians.
I believe business contributes more to the prosperity of humanity, and is more important to the continued prosperity of humanity than any other institution. It's worth asking the question, what got us collectively to a place where business has lost that level of trust in society?
Whether it be the environment, healthcare, energy sustainability, whether it be making sure that people have access to information, I can't think of any major problem that society confronts today in which solutions would be found without business playing some part. And yet, we find ourselves in this relationship where trust has been so badly damaged between business and society. We reach a place in which it almost feels like a vicious cycle in which nothing progressive is going to happen. So I think that there's a very important moment right now in which we have to somehow turn this cycle in the other direction, to restore business to a place where it continues to be experienced as an honorable calling, an honorable profession, a thing that can make great progress in society, where its leaders can be trusted to do the right thing.
How can we make sure that we restore society's faith? I think one of the ways in which we have to do it is to start introducing progressive ideas and practices that demonstrate to the world that it isn't the case that all we care about at the end of the day is profit at the expense of everything else. It's not that profits aren't important; no business survives without making profits. But there is no reason why that goal has to be incompatible with other things businesses do at the same time.
In some ways, I think of integrated reporting as one effort to begin to restore society's trust. If we start in various ways reporting back to society that we care, these reports begin to show that in fact we're as serious about holding ourselves accountable to and measuring ourselves on a wide variety of matters that people care about.
My understanding of the state of integrated reporting is that you see all of these reports that companies are producing, each in their own way, each not guided today by any clear sense of what the top-down standard is. But rather than be anxious about that, maybe what we should do is celebrate it, and just allow a lot of these things to bubble up through those reports. Then having some kind of coordinating body at the top--which I know there are a few that have been created now--we can begin to extract what this process looks like, allowing other people to be inspired by it. And hopefully out of that some standards will emerge. And they might emerge more spontaneously rather than emerging 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 ideas and to provide support and momentum for ideas that are a little bit ahead of their time. We can be at the front edge of this and we can have influence by bringing management thinking, management practice and management perspective.
This process might take some time. Be patient with yourselves. This is not just for the sake of business, but for the sake of society, because I deeply believe that business is an engine for one manner of prosperity in society. Business has a role to play in addressing most of the challenges that society faces. And in some ways, by taking on this integrated reporting initiative, business can show its commitment in that direction, restore confidence and trust in society, and, I think, return to a productive cycle in which business and society have a positive relationship.
