Organisations need integrated reporting

This is the season of annual financial reporting for listed companies, many producing these data just to meet regulatory compliance.

But, globally, corporate reporting is moving towards integrated reporting which combines quantitative (financial) and qualitative (non-financial) information that communicates much about the company to various stakeholders and not just meeting the regulatory requirement.

Integrated reporting is the next generation of corporate reporting, it is more than just the short-term financial numbers but also includes all areas of performance against the company’s strategy.

It simply provides a full picture of the organization to all interested stakeholders to make a more informed assessment of the organization when analyzing the company.

Essentially, an integrated report contains corporate governance information like human rights record, labour relations, gender balance occupational health and safety record, electricity consumption, water consumption, fuel consumption, waste management, anti-corruption monitoring measures as well as a sustainability report.

Forward-looking organisation are moving towards this corporate reporting realizing that various stakeholders today are big information consumers and therefore need a full picture of the company.

In Kenya, Safaricom, KCB Group, Co-operative Bank, Stanbic produce their integrated reports which is a progressive move because the company helps stakeholders understand how the organization creates value including employees, customers, suppliers, business partners and local community.

Though according to the EU Accounting Directive, not only large and publicly listed company should move towards integrated reporting, but a company that has 250 employees, a balance sheet exceeding EUR 20 million and revenue exceeding EUR 40 million should subject itself to this disclosure requirements.

So, it would be quite progressive to see non-listed companies producing integrated reports so we can we get to know these companies at a different level.

Looking at the various integrated reports released, they provide interesting information. For someone who has an economist eyes like mine, it was noticeable that KCB has an interesting indicator they track in their report and that is the revenue generated per staff which stands at 12.8 million in 2020.

This indicator is interesting because stakeholders can use it to monitor how the company is putting its human capital in full use and also compare the performance across other corporates.

Though the other integrated reports don’t track this indicator but estimating it by weighting a company’s revenue against total employees, Safaricom’s revenue generated per staff stands at 42 million whilst Co-op Bank stands at 9 million. Stanbic didn’t not release information about its total staff numbers.

Its more interesting looking at the number of employees this companies have, despite having the highest revenue generated per staff, Safaricom also has a big workforce relative to size of operations.

A look at KCB Group, it has a regional presence operating in Kenya, Uganda, Tanzania, South Sudan, Rwanda, Burundi and has a total staff of 7525 only across these countries. Safaricom which has operations in Kenya only has 6185 full time employees on its payroll. Co-operative on the other hand has 4422 employees in 2019.

KCB Group seem to the organization running with a lean workforce considering its regional presence. At the same time looking at salaries and remuneration as a percentage of revenue, Co-operative Bank runs the highest cost at 28 percent, KCB Group running at 2.7percent whilst Safaricom is at 6.4percent.

KCB Group lean workforce may be explained that its due to the banking sector moving largely towards more digital transactions but Safaricom a telecommunication company is having a large workforce. Do Telecommunication companies need more staff than banks?

On gender balance, Co-operative Bank boosts of 58percent of total staff female and Safaricom at 50 per cent whilst at senior management roles Safaricom has 35per cent women but Co-operative Bank doesn’t provide the ratio at senior management.

For KCB, 45 per cent of its total staff are female with 35 per cent of management roles held by women.