Paul Scott and Iain McGhee from CorporateRegister.com comment on Mallen Baker’s September column
Mallen Baker’s column Verification – Trust me, I’m an assurer, September 2008 did not accurately reflect the content, aims, or background of the Assure View report.
1) Baker’s question “to verify or not to verify?” is not what we asked or attempted to answer through the Assure View report. That is a decision for the reporting company to make. The fact is that CSR assurance is an established field – Assure View looks at 4,500 published statements in conjunction with a detailed sample study. As can be seen from the report introduction, we set out to look at developments and identify best practice. One of CorporateRegister.com’s interests in this area was in providing companies with facts and insights into how an assurance statement can be formulated, thus enabling them to make informed decisions about their assurance engagements.
The Assure View report would never have come to the conclusion that “assurance is a waste of money” – we simply didn’t have the data to answer that question, and we didn’t try to. Whether a reporter should use assurance at all is of course a very interesting question, but not one we asked.
2) Baker cites an example of an assured report he has read, relating this to our own study in a negative light that seems to confirm a misreading of our report. One of our key elements for inclusion in an assurance statement is a clearly stated methodology. If the report Baker references had a statement which included a clearly stated methodology outlining which indicators were being covered and on what basis, the issues he describes would have been clear for all to see.
To repeat, this is ultimately what we were addressing, statements as the communication of an assurance process. We weren’t judging the “quality” of the assurance process itself, rather advocating consistent and transparent approaches to its communication. As we say in Assure View, good CSR reports rely on being transparent and accountable, and so should assurance statements. As a probing journalist we would hope that such openness in statements would be of interest to Baker.
3) The freely available report represents over two months of research and writing and considerable production costs – the sponsors contributed to these costs. We prefer to make information freely available wherever possible.
Through empirical analysis we show that the market is dominated by three distinct provider types (the big four accountants, certification bodies and specialist consultancies). It’s intuitive that each of the provider types should discuss their own approaches – again, as our data clearly shows, these approaches vary significantly. Where external sponsor opinion is expressed it is clearly demarcated.
In total we had four pages (out of 44) with sponsor input, hardly “assurance providers endlessly coming to the stunning conclusion that assurance is an essential part of reporting”. Three of these pages reflected a panel discussion which we chaired, where only one of five questions addressed whether reports need to be assured. The other questions covered approaches to and content of assurance statements. Many readers of the report will be making decisions on which type of service provider to use in their assurance engagements. We are offering these people information on the nature of the marketplace through a combination of our own research and statements from the actual providers.
4) It is simply unreasonable to suggest that our conclusions were shaped by our sponsor relationships. Are CSR magazines and conferences also irritating because they have established financial relationships with vendors? Does it frustrate Baker to find a large Shell banner advert in the middle of his online column? As Shell are one of the companies pioneering alternatives to conventional assurance are we to assume that his own views are shaped by this relationship? Does this mean we cannot trust any CSR publication with corporate advertisements or sponsorship?
Our research methodologies are clearly stated, the findings clearly presented. The facts do indeed speak for themselves, and a read of pages 12-19 and 24 demonstrates that those results do not always reflect well on assurance providers, including those involved as sponsors.
5) Baker concludes his article by stating “The state of the art still has some way to go” and on this we can agree. Our contribution is to produce a free publication to be disseminated as widely as possible, drawing on a decade of reporting experience, the world’s largest database of CSR reporting/assurance data, three major practitioners, and three international standard setting bodies to look at these issues and construct a foundation for future dialogue on this issue.
Paul Scott
Iain McGhee
CorporateRegister.com
Ethical Corporation welcomes all comments and correspondence. Please contact the readers’ editor at ian.welsh@ethicalcorp.com