A Vision for Integrated Thinking and the Role of Finance Professionals

Stathis Gould | February 1, 2016 |

In my earlier article, Corporate Governance and Transparency—The Chicken or the Egg of Sustainable Development?, I referred to integrated thinking as the critical foundation of integrated reporting. Without it, the ultimate objective of sustainable organizations, markets, and societies cannot be achieved. The chicken and egg analogy can be applied to integrated thinking and integrated reporting: while reporting can lead to a journey of greater transparency and, hopefully, behavior change within an organization, leadership on integrated thinking is the key to unlock a change of mindset and purpose.

IFAC recently published Creating Value with Integrated Thinking: The Role of Professional Accountants to highlight the important role accountants play in integrated thinking. Integrated thinking and reporting provides a means and additional incentive for CFOs, and their finance teams, to focus on the information and decisions that matter to the organization and its potential success. For finance teams that have begun to shift toward business partnership within their organization, the principles and concepts of integrated thinking and reporting are a natural progression on their journey.

The publication sets out a vision and framework for integrated thinking and explores what professional accountants working in the public and private sectors can do in practical terms to facilitate it in their organization, regardless of whether their organization is planning to publish an integrated report. The report identifies five key elements, which, if implemented, can lead to more effective organizations and ultimately provide the basis for shifting from today’s financially oriented reporting to integrated reporting.

The benefits of integrated thinking are already having an impact. Realizing the Benefits: The Impact of Integrated Reporting, published by the International Integrated Reporting Council (IIRC) and Black Sun, provides evidence of the nature of the benefits of integrated thinking. The IIRC’s Pilot Programme, which ran for three years, yielded a great deal of research from participating organizations. This research and first-hand experience shows that many organizations captured the benefits of integrated thinking, including a range of strategic and operational benefits. Results from the Programme include, for example:

  • 71% of participants experienced strategic benefits, the most important being a change in conversations between the board and management;
  • 79% reported improvements in management information and decision making; and
  • 96% experienced a positive impact from connecting departments and broadening perspectives.

Integrated thinking is also addressed in Mervyn King and Leigh Robert’s Integrate: Doing Business in the 21st Century, which usefully provides a clear purpose to integrated thinking.

  • Financial and nonfinancial performance are no longer separated, and the entire organization accepts that one affects the other.
  • The organization’s strategy is shared by all functions and divisions.
  • Decision making is carried out with a longer-term view on value creation.


In IFAC’s thought paper, we explain that integrated thinking is sparked by a connected approach. Connectivity supports the other four key areas of integrated thinking: an external value focus, integrated planning, effective governance and oversight, and integrated communications.

An external focus is a critical starting point for identifying and articulating how value is created and destroyed. Identifying and understanding relevant matters for decision making involves bringing together information and analysis from various sources, including trends in the business environment and market; understanding the impact their products and services have on society and on markets; understanding what impacts the organization’s reputation and public perception; and the overall customer experience.

As a finance professional, it will be difficult to add value to this process without a broader connection to, and understanding of, the industry, business environment, and stakeholder perceptions. This awareness and understanding is the basis of facilitating an understanding and assessment of the relevant drivers of value.

Integrated planning—that is, the insights gained from an external value focus form the basis of integrated planning—should incorporate a comprehensive process of identifying and managing significant matters affecting value creation over the short, medium, and long term. Integrating relevant and material matters throughout the planning and management process involves an integrated approach to risk management, budgeting, and performance management. The integrated planning process ensures that the necessary information and analysis is presented in a manner that allows managers at all levels to use it to make effective decisions. Furthermore, this level of integration encourages all parts of an organization to have a common view of what is important and the measures of success.

Effective governance and oversight leads to credibility among stakeholders in the data, information, and insights provided. Appropriate governance and oversight structures ensure effective processes and accountabilities for all organizational initiatives and, ultimately, lead to better performance. For example, the importance and credibility of nonfinancial data, or data that has not previously been subjected to the oversight of the board and its audit committee, can lack robustness and credibility. CFOs and their finance functions can begin to educate and train other parts of organizations about how to ensure their nonfinancial data achieves the same quality and credibility as financial data.

To achieve integrated communications, the organization needs to communicate effectively on the full range of issues impacting value creation across the six capitals underpinning the value creation model in the International <IR> Framework. This is a new perspective for many organizations, and the shift from a financial focus requires communication by leadership in ways that significantly influence the organization’s behavior, and that flow naturally from an integrated planning approach.

Integrated thinking ultimately needs to change corporate behavior and lead to more resilient organizations and greater trust in business and government. Professional accountants—as business partners involved in organizational leadership and decision support—should be considering how to operationalize integrated thinking as a means of engaging those beyond the finance and accounting departments.

The thought paper reflects integrated thinking as we understand it today, given that this is a period of experimentation for many organizations. I encourage your ongoing feedback on the vision and ideas, and the specific role of finance professionals.

Stathis Gould

Deputy Director, Professional Accountants in Business, IFAC

Stathis Gould heads up the development of international services for professional accountants working in business and industry at IFAC. A key element of his work is developing thought leadership and guidance in support of finance professionals and their roles facilitating sustainable organizational performance. Before moving to IFAC, he was at the Chartered Institute of Management Accountants (CIMA) responsible for planning and overseeing a program of policy and research. Prior to serving the accountancy profession, Mr. Gould worked in various roles in the private and public sectors in the UK. See more by Stathis Gould

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