A new approach to assurance, which includes stakeholders

Source: JustAssurance, 12 December 2003

A different approach to social, environmental and sustainability assurance is now available, based on stakeholder-inclusion and materiality of issues. Developed by justassurance, a newly formed social enterprise of experienced assurance practitioners and thought leaders, this new approach consults with and includes stakeholders in the assurance process.
The innovative approach not only tests whether the things in the report are right but also whether the right things are in the report, from the view of stakeholders, for whom the report is designed to be read. It provides a tangible framework for more fully involving stakeholders that complements the current debate on materiality, AA1000 the Framework Standard of systematic stakeholder engagement, and AA1000 AS the Assurance Standard.

On 13th January 2004 justassurance will be hosting a debate on current and future assurance frameworks involving participants from the corporate world, NGOs and assurance providers. The debate aims to highlight the different perspectives of participants and seek common ground on moving forward to enhanced assurance mechanisms. The debate will take place at The Work Foundation in London. This debate, and the ongoing assurance process for Co-operative Financial Services’ forthcoming sustainability report, will mark the start of the organisations commitment to drive forward an agenda of evolving non-financial assurance to a higher plain, through systematic stakeholder engagement.

The founders of justassurance are social accountant and author Adrian Henriques of Henriques & Co Ltd, and experienced assurance providers Jon Woodhead and Mark Line of csrnetwork Ltd. justassurance is managed by Lucy Candlin currently with csrnetwork and previously part of the team responsible for the development and delivery of KPMGs assurance related projects. The organisation also maintains an Advisory Group of individuals with a background in key areas of corporate social responsibility and sustainability reporting.

The motivation to form justassurance came from current inadequacies in the non-financial assurance process and statement. Adrian Henriques explains: The assurance process that is often carried out today is often too narrow in its ambitions and scope and often the depth and insight which assurance providers achieve is too limited. As a result, it doesnt provide the level of confidence that many stakeholders are looking for.

Similarly, the current practice of assurance is very confusing continues Mark Line. Companies have different motives for commissioning statements; some assurance statements are very short, some long and detailed. Some operate to AA1000 AS, the standard for accountability assurance, whilst some struggle with standards designed for financial reporting. Even those operating to the same standard can produce very different results. And in all this, it is unusual to find much input from the stakeholders at whom the companies reports are directed. The justassurance approach provides a highly relevant alternative – an opportunity for complete assurance, from the point of view of accuracy and issues materiality, built upon a framework that complements leading thought and current debate.

Lucy Candlin points out that the justassurance stakeholder-inclusive approach does not replace the stakeholder dialogue that companies will have had as part of day-to-day operations, and as part of report preparation. She says: There is a growing recognition by business that stakeholders need to be consulted and included by the company during its ordinary business, in order to be able to run a business that manages all of its risks, meets the needs of those stakeholders, and can also produce a report that covers the issues that are material to all key stakeholders. However, if this hasnt occurred sufficiently, then the assurance provider needs to consult and include stakeholders during the assurance process to ensure material issues are recognised.

The justassurance stakeholder-inclusive approach compliments the debate currently raging around issues of materiality, not least due to the Operating and Financial Review (reporting) guidance being developed by the Government.

The approach follows the AA1000 AS (the Assurance Standard) model, and within this, emphasises stakeholder-inclusive assurance. justassurance also has the advantage of real independence and impartiality, two criteria for this Standard, though being a non-profit distributing social enterprise.