Charlie Helps Associates is pleased to host Value Preservation and Corporate Defense Author Sean Lyons as guest author introducing the Transition to Integrated Thinking in the Boardroom

The Value Reporting Foundation

In June 2021, the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) merged to form the  Value Reporting Foundation (VRF). The final consolidation of the VRF into the IFRS Foundation is due to be fully completed in August 2022.

At the beginning of August 2022 the VRF published a paper entitled Transition to Integrated Thinking: a guide to getting started to assist senior leadership and those charged with governance in an organization on their journeys towards embedding integrated thinking. The Guide introduces integrated thinking and the Principles, as well as explores the benefits and challenges of practicing integrated thinking. It delves further into the three levels of the Principles, helping organizations assess the extent to which integrated thinking has been adopted through questions and statements. The roadmap provides a five step approach to fully applying integrated thinking into an organization, from the assessment stage through to the review and improve stage.

This article which is an extension to some of my previous articles (see further reading below) on the value preservation imperative, continues in a similar vein and should be read in that context. It primarily focuses on the social, ethical, and moral obligation to preserve, protect, and defend stakeholder value from value destruction (erosion, reduction, decline, and depletion). Therefore, it is concerned with the requirement to explicitly address the value preservation obligation as a fundamental enterprise imperative.

Transition to Integrated Thinking: a guide to getting started

In the About the Guide section of this publication the VRF states the following:

“This guide helps you begin, or continue on, your journey towards embedding integrated thinking into your organization. It provides a structured path to help navigate the challenges and recognize the benefits of an integrated thinking approach to enhance decision-making and actions that affect the creation, preservation or erosion of value in your organization over time,”

Transition to Integrated Thinking

Download the Transition to Integrated Thinking Guide

In the Value Reporting Foundation section of the publication it states the following:

“The VRF is a global non-profit organization that offers a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value — how it is created, preserved or eroded over time.”

In section 1 entitled Foreword it states the following:

“… We have taken time to listen to how organizations around the world have tackled these barriers, begun their integrated thinking journeys and can now better understand how and where they create, preserve and erode value.”

In section 2 entitled Integrated thinking: an introduction it states the following:

“Integrated thinking is defined as ‘the active consideration by an organization of the relationships between its various operating and functional units and the capitals that the organization uses or affects. It leads to integrated decision-making and actions that consider the creation, preservation and erosion of value over the short, medium, and long term … It can balance short- and medium-term performance needs with a longer-term approach to value creation and preservation.”

In the sub-section entitled Integrated thinking and integrated reporting it states the following:

“Integrated thinking leads to integrated decision-making and actions that consider the creation, preservation or erosion of value over the short, medium and long term.”

In the sub-section entitled The Integrated Thinking Principles it states the following:

“The Integrated Thinking Principles help those charged with governance, the executive management team, managers and their teams better understand how their actions and activities – and the decision-making that underpins both – contribute to long-term value creation and preservation and avoid value erosion.” 


“Performance: Measure and communicate the value your organization has created, preserved and eroded.”

In section 4 entitled The Roadmap: planning your integrated thinking journey in the sub-section entitled Step1: Assess it states the following:

“Building internal awareness and knowledge about how the organization creates, preserves or erodes value over time.”


“Assessing the trade-offs that occur in resource allocation decision-making processes helps organizations to consider the different time horizons, stakeholders and capitals which are at stake when value is created, preserved or eroded.”

In section 5 entitled The Integrated Thinking Resource Hub in relation to the principle of Governance it states the following Key Business Process Question:

“Do the decision-making processes of those charged with governance assess value creation, preservation and erosion across all the capitals which are material to the decision being taken, and do they balance the necessary trade-offs between the capitals?”

In relation to the principle of Strategy it states the following Key Business Process Question:

“Are our organization’s strategy and strategic objectives clearly defined, forward looking and responsive to longer-term drivers of value creation, preservation and erosion such as technological, societal and environmental changes?” 

In relation to the principle of Risks & Opportunities it states the following Key Business Process Question:

“Do those charged with governance complete a regular cross-functional assessment of our organization’s material issues and how they affect its ability to create and preserve value?

In relation to the principle of Performance it states the following Key Business Process Question:

“Does our organization use KPls to measure the value it has created, preserved or eroded over time across its material capitals? Does it report all these KPls and draw on them in decision-making and resource allocation?”

In section 6 entitled Glossary in the sub-section entitled Integrated report it states the following:

“A concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation, preservation or erosion of value in the short, medium and long term.”

In the sub-section entitled Integrated thinking it states the following:

“… Integrated thinking leads to integrated decision-making and actions that consider the creation, preservation or erosion of value over the short, medium and long term …” 

In the sub-section entitled Value creation, preservation or erosion it states the following:

Value created, preserved or eroded by an organization over time manifests itself in increases, decreases or transformations of the capitals caused by the organization’s business activities and outputs. That value has two interrelated aspects – value created, preserved or eroded for: • The organization itself, which affects financial returns to the providers of financial capital • Others (i.e. stakeholders and society at large).”

2. Value-Centric Trinity: Value Creation, Value Preservation, and Value Destruction

Any focus on value as a concept (i.e. enterprise value or stakeholder value etc) should include due consideration of the dynamics of the value-centric trinity which is represented by value creation, value preservation, and value destruction (including erosion, reduction, decline, and depletion).

Sustainable Value = Value Creation + Value Preservation (Avoidance of Value Destruction)

Logically the delivery of sustainable value over the short, medium, and long-term requires a healthy balance between the focus on value creation and the focus on value preservation in all decision making at strategic, tactical, and operational levels. Value preservation is typically concerned with the avoidance of value destruction. Prudence suggests that in order to sustain value an entity must both create and preserve value over an extended period of time, while common sense suggests that a failure to preserve value will inevitably result in the destruction of value. A sustainable future requires due diligence in relation to our focus on value preservation.


The contribution of the VRF paper in this space is considered critical because it recognizes that integrated thinking requires holistic decision making which needs to consider the affect that decisions can have on value creation, value preservation, and value destruction. Integrated thinking can therefore help businesses and investors develop a better understanding of enterprise value and how it is created, preserved or eroded over time. The guide explains how integrated thinking requires a holistic view of strategy, governance, performance and prospects in order to deliver long-term sustainable stakeholder value. In my opinion this paper, which builds on the VRF’s Integrated Thinking Principles, represents another very important development in this space.

Further Reading:

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