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Book part
Publication date: 28 June 2016

Belverd E. Needles, Mark L. Frigo, Marian Powers and Anton Shigaev

Prior research shows that companies that achieve high performance excel at certain financial objectives. This chapter addresses the question: Do companies that excel at…

Abstract

Purpose

Prior research shows that companies that achieve high performance excel at certain financial objectives. This chapter addresses the question: Do companies that excel at these financial performance objectives also excel in integrated reporting and sustainability reporting?

Methodology/approach

We compare a sample of high performance companies (HPC) with a sample of companies that purport to support integrated reporting, and a sample that purport to support sustainability reporting. Our hypotheses are that HPC will equal or exceed the integrated reporting and sustainability reporting practices shown by International Integrated Reporting Committee (IIRC) and Global Reporting Initiative (GRI) companies and US companies will be less at these practices than non-US companies.

Findings

Our findings indicate that IIRC companies and GRI companies generally do not meet the high financial performance measures of the HPC. Based on an integrated reporting and sustainability reporting matrix, we show that HPC exhibit equal performance on the practices of sustainability and integrated reporting compared to GRI companies, but both HPC and GRI are lower on these practices than IIRC companies. Also, US companies disclose less information in sustainability reports and integrated reports as compared to non-US companies. Overall, all three groups fall short of full compliance with standards of integrated reporting and sustainability reporting.

Originality/value

This chapter provides evidence as to the financial performance and the current state of integrated reporting and sustainability reporting among HPC, GRI, and IIRC companies. This chapter highlights the global need for a generally accepted set of standards for sustainability and integrated reporting practices.

Details

Performance Measurement and Management Control: Contemporary Issues
Type: Book
ISBN: 978-1-78560-915-2

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Article
Publication date: 28 July 2020

Lucia Biondi, John Dumay and David Monciardini

Motivated by claims that the International Integrated Reporting Framework (IRF) can be used to comply with Directive 2014/95/EU (the EU Directive) on non-financial and…

Abstract

Purpose

Motivated by claims that the International Integrated Reporting Framework (IRF) can be used to comply with Directive 2014/95/EU (the EU Directive) on non-financial and diversity disclosure, the purpose of this study is to examine whether companies can comply with corporate reporting laws using de facto standards or frameworks.

Design/methodology/approach

The authors adopted an interpretivist approach to research along with current regulatory studies that aim to investigate business compliance with the law using private sector standards. To support the authors’ arguments, publicly available secondary data sources were used, including newsletters, press releases and websites, reports from key players within the accounting profession, public documents issued by the European Commission and data from corporatergister.com.

Findings

To become a de facto standard or framework, a private standard-setter requires the support of corporate regulators to mandate it in a specific national jurisdiction. The de facto standard-setter requires a powerful coalition of actors who can influence the policymakers to allow its adoption and diffusion at a national level to become mandated. Without regulatory support, it is difficult for a private and voluntary reporting standard or framework to be adopted and diffused. Moreover, the authors report that the <IRF> preferences stock market capitalism over sustainability because it privileges organisational sustainability over social and environmental sustainability, emphasises value creation over holding organisations accountable for their impact on society and the environment and privileges the entitlements of providers of financial capital over other stakeholders.

Research limitations/implications

The authors question the suitability of the goals of both the <IRF> and the EU Directive during and after the COVID-19 crisis. The planned changes to both need rethinking as we head into uncharted waters. Moreover, the authors believe that the people cannot afford any more reporting façades.

Originality/value

The authors offer a critical analysis of the link between the <IRF> and the EU Directive and how the <IRF> can be used to comply with the EU Directive. By questioning the relevance of the compliance question, the authors advance a critique about the relevance of these and other legal and de facto frameworks, particularly considering the more pressing needs that must be met to address the economic, social and environmental implications of the COVID-19 crisis.

Details

Meditari Accountancy Research, vol. 28 no. 5
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 17 July 2019

Gerard William Stone and Sumit Lodhia

A goal of integrated reporting (IR) under the International Integrated Reporting Council (IIRC)’s leadership is to provide clearly written, comprehensible and accessible…

Abstract

Purpose

A goal of integrated reporting (IR) under the International Integrated Reporting Council (IIRC)’s leadership is to provide clearly written, comprehensible and accessible information. In light of this objective, the purpose of this paper is to explore the readability and accessibility of integrated reports, an issue magnified by the IIRC’s continual commitment to clear and readable report language, and its intention for IR to become the corporate reporting norm.

Design/methodology/approach

In a whole text software facilitated analysis, the study utilises readability measures and supplementary measures of reader accessibility in a multi-year analysis of a large sample of global integrated reports sourced from the IIRC examples database.

Findings

The findings highlight the low readability of analysed integrated reports and indicate that readability is not improving. The supplementary measures suggest sub-optimal use of visual communication forms and overuse of structural presentation techniques which may contribute to reader accessibility of the analysed reports.

Research limitations/implications

The study extends readability analysis to an emerging corporate reporting phenomenon and its findings contribute to the growing IR literature. The study applies supplementary measures of reader accessibility which advance the methods available to assess the communication efficacy of integrated and other corporate reports.

Practical implications

The analysis of the readability and accessibility of integrated reports in the study indicates that the IIRC’s goal of clear, comprehensible and accessible reporting is not reflected by reporters’ practices. This has implications for the IIRC, reporting organisations, report readers and regulators.

Originality/value

The study represents the first large-scale analysis of the readability and accessibility of global integrated reports.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 5
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 16 March 2015

Marek Reuter and Martin Messner

The purpose of this paper is to examine formal participation in the early phase of the International Integrated Reporting Council’s (IIRC’s) standard-setting. The…

Abstract

Purpose

The purpose of this paper is to examine formal participation in the early phase of the International Integrated Reporting Council’s (IIRC’s) standard-setting. The objective of the paper is to shed light on the characteristics of lobbying parties and the determinants of their lobbying behavior toward the IIRC. Additionally, the most important points of contestation regarding the IIRC’s initial proposal for integrated reporting are identified and discussed.

Design/methodology/approach

The authors analyze comment letters issued toward the IIRC’s 2011 discussion paper on the basis of a content analysis. The analysis is guided mainly by Sutton’s (1984) rational-choice model of lobbying and by findings from extant financial accounting lobbying research. The analysis of the data is both quantitative and qualitative.

Findings

The paper improves the understanding of the political nature of standard-setting in the context of integrated reporting. Among other things, the authors find that comment letters toward the IIRC’s discussion paper are mainly written by large multinational firms (as opposed to small- and medium-sized ones) and by preparers (as opposed to users). The authors also observe active lobbying by sustainability service firms and professional bodies which tend to take a critical position vis-à-vis the discussion paper’s emphasis on investor needs and shareholder value creation. Moreover, the qualitative analysis reveals that respondents voice different concerns regarding, for instance, the scope of audience of integrated reporting, issues of materiality and the relationship between integrated reporting and other existing reporting frameworks.

Research limitations/implications

The analysis is limited to a consideration of the 2011 discussion paper of the IIRC. The IIRC’s more recent and forthcoming proposals will likely provide a basis to extend the paper’s findings and allow investigation of the role of lobbying for the further development of the framework.

Originality/value

The paper is, to the best of the knowledge, the first one to explore lobbying behavior by means of comment letters in the context of integrated reporting.

Details

Accounting, Auditing & Accountability Journal, vol. 28 no. 3
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 10 April 2017

Tianyuan Feng, Lorne Cummings and Dale Tweedie

Integrated thinking is central to the International Integrated Reporting Council’s (IIRC’s) integrated reporting (IR) framework, which is in turn is related to a potential…

Abstract

Purpose

Integrated thinking is central to the International Integrated Reporting Council’s (IIRC’s) integrated reporting (IR) framework, which is in turn is related to a potential resurgence of intellectual capital (IC) reporting. However, it remains unclear how key IR stakeholders understand this concept in theory or practice. The purpose of this paper is to explore how key stakeholders interpret integrated thinking; and how pilot organizations are applying integrated thinking in practice.

Design/methodology/approach

The study involved in-depth semi-structured interviews with key IR stakeholders in Australia, including two IR pilot organizations, one professional association, an accounting professional body, an accounting firm and two IIRC officials.

Findings

First, the IIRC has not fully defined and articulated the concept of integrated thinking, and there is no shared consensus among practitioners. Second, there is evidence of an evolving understanding of integrated thinking within practice. What remains unclear is how this understanding will develop over time.

Research limitations/implications

Since interviews were conducted with a relatively small sample of participants in Australia, the results may not be generalizable across different contexts. The study emphasizes the need to interpret carefully IR’s potential contribution to organizational practice through either reporting in general, or IC reporting in particular.

Originality/value

Despite the centrality of integrated thinking to IR, there has been limited research to date on the concept. Clarifying what integrated thinking means in practice can improve our understanding of a key IR concept, and can advance our understanding of IR’s potential to improve IC reporting and research.

Details

Journal of Intellectual Capital, vol. 18 no. 2
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 27 August 2014

Axel Haller and Chris van Staden

The purpose of this paper is to contribute to the current discussions about the concept of Integrated Reporting (IR) and provides a practical and useful proposal of an…

Abstract

Purpose

The purpose of this paper is to contribute to the current discussions about the concept of Integrated Reporting (IR) and provides a practical and useful proposal of an instrument that could help to apply the IR concept in corporate practice.

Design/methodology/approach

The study uses a deductive normative research approach.

Findings

Based on a comprehensive review of international literature and research, the paper argues that a structured presentation of the traditional measure of “value added” in a so-called “value added statement” (VAS) has the potential to serve as a practical and effective reporting instrument for IR. The proposed VAS not only meets the guiding principles of IR but also reports on the monetary effects of different types of capital included in IR and in this way complements and represents the concept of IR very well.

Research limitations/implications

The authors intend to stimulate the academic as well as institutional discussion on how to apply the concept of IR at the corporate level. As the characteristics of the proposed VAS comply well with the guiding principles and concepts developed in the Integrated Reporting Framework project of the International Integrated Reporting Council (IIRC) and with the ultimate objective of integrated thinking, the study can inform the current considerations within and outside of the IIRC.

Originality/value

The future of IR and the probability of its world-wide application in practice will depend on the development of appropriate reporting tools that incorporate the central ideas of IR, currently no such reporting tools exist. In this paper the authors make an argument for a VAS as a complementing, useful and therefore appropriate reporting tool for IR.

Details

Accounting, Auditing & Accountability Journal, vol. 27 no. 7
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 2 October 2017

John Dumay, Cristiana Bernardi, James Guthrie and Matteo La Torre

This paper is motivated by the call for feedback by the International Integrated Reporting Council (IIRC) from all stakeholders with knowledge of the International…

Abstract

Purpose

This paper is motivated by the call for feedback by the International Integrated Reporting Council (IIRC) from all stakeholders with knowledge of the International Integrated Reporting Framework (<IRF>) and specifically of the enablers, incentives and barriers to its implementation. The paper synthesises insights from contemporary accounting research into integrated reporting (IR) as a general concept and <IR> as espoused by the IIRC in the <IRF> (IIRC, 2013). The authors specifically focus on possible barriers and emphasise the specific issues the authors feel could be rectified to advance the <IRF>, along with the areas that may potentially hinder its wider adoption and implementation.

Design/methodology/approach

The paper draws upon and synthesises academic analysis and insights provided in the IR and <IR> academic literature as well as various directives, policy and framework pronouncements.

Findings

The flexibility and lack of prescription concerning actual disclosures and metrics in the <IRF> could allow it to be used for compliance, regardless of the other benefits lauded by the IIRC. Thus the authors see forces, both external and internal, driving <IR> adoption, with one prominent example being the European Union Directive on non-financial reporting. Because of the different ways in which IR is understood and enacted, there are numerous theoretical and empirical challenges for academics. The authors paper highlights potential areas for further robust academic research and the need to contribute to <IR> policy and practice.

Research limitations/implications

The paper provides the IIRC, academics, regulators and reporting organisations with insights into current practice and the <IRF>. The authors highlight the need for further development and evidence to help inform improvements both from a policy and a practice perspective. A key limitation of the authors’ work is that the authors draw upon a synthesis of the existing literature which is still in an early stage of development.

Originality/value

The paper provides the IIRC with several insights into the current <IRF> and specifically with the enablers, incentives and barriers to its implementation. Also, it provides academic researchers with a number of important observations and an agenda upon which the authors can build their future research.

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Book part
Publication date: 12 March 2020

Sergio Paternostro

There are still many different theoretical approaches and practical interpretations about what an integrated report is. Starting from this premise, the overall purpose of…

Abstract

There are still many different theoretical approaches and practical interpretations about what an integrated report is. Starting from this premise, the overall purpose of this chapter is to critically analyze the relationship between integrated reporting (IR) and social/sustainability disclosure. Indeed, although some scholars considered IR as a tool to improve the sustainability approach of the companies allowing to disclose more relevant social information, others are more critical about the potentiality of IR to improve social disclosure. Therefore, the general research question is: Is there a natural link between IR and social disclosure (true love) or is the IR a practice to “normalize” the social disclosure and accounting (forced marriage)?

In the attempt to provide a preliminary answer to the research question, the chapter analyzes what is the approach of three categories: (1) academics; (2) soft-regulators; and (3) companies. From the methodological point of view, a mixed method of analysis has been adopted.

From the analysis of the three different points of view, IR can be considered as a “contested concept” because of the heterogeneous and sometimes conflicting interpretations and implementation that are done on this type of report. This leads to relevant theoretical and practical implications.

Details

Non-Financial Disclosure and Integrated Reporting: Practices and Critical Issues
Type: Book
ISBN: 978-1-83867-964-4

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Book part
Publication date: 4 October 2018

Belverd E. Needles, Marian Powers, Mark L. Frigo and Anton Shigaev

This study establishes a baseline evaluation of sustainability reporting (SR) and integrated reporting (IR) practices among groups of companies globally using a combined…

Abstract

This study establishes a baseline evaluation of sustainability reporting (SR) and integrated reporting (IR) practices among groups of companies globally using a combined evaluation matrix. We evaluate a sample of high performance companies (HPC), global reporting initiative (GRI) companies, international integrated reporting committee (IIRC) companies, and a control group of companies that do not belong to any of these groups. We test for high performance and compliance with a 30-point evaluation matrix for financial reporting, corporate governance, integrated disclosure, SR, and assurance developed from the standards set by GRI and IIRC. This chapter provides evidence as to the current IR and SR states, and shows that considerable variation exists even among companies that have pledged to improve reporting in this arena. The analysis also shows that companies that belong to no special group do in fact score on a level that shows that SR and IR standards are being implemented by many companies in the world, not just those in special groups like the HPC, GRI, and IIRC. Finally, this study provides direction for global regulators and professional associations, and to the management of companies that aspire to HPC status while meeting the IR and SR standards.

Details

Performance Measurement and Management Control: The Relevance of Performance Measurement and Management Control Research
Type: Book
ISBN: 978-1-78756-469-5

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Article
Publication date: 2 October 2017

John Dumay and Tim Dai

The paper’s purpose is to investigate the concept of integrated thinking as part of the International Integrated Reporting Council’s (IIRC’s) Integrated Reporting (<IR>…

Abstract

Purpose

The paper’s purpose is to investigate the concept of integrated thinking as part of the International Integrated Reporting Council’s (IIRC’s) Integrated Reporting (<IR>) framework. It explores integrated thinking as a cultural control and analyses how it operates.

Design/methodology/approach

The paper presents a case study of ResBank (a pseudonym), a small Australian bank, which is participating in the IIRC’s <IR> Pilot Programme Business Network. ResBank issued its first integrated report in 2012. Using semi-structured interviews, we examine whether integrated thinking develops as espoused by the IIRC.

Findings

In ResBank’s case, we find that the responsible banking culture that was in place prior to joining the Pilot Programme is a stronger cultural control, alongside personnel, results and action controls. The implication for the IIRC is that integrated thinking clashes with the existing organisational culture rather than driving a new organisational culture.

Practical implications

If integrated thinking is to prevail, it may become a source of inertia rather than change because it advocates that an entire workforce should think the same way. We also question whether breaking down silos, as advocated by integrated thinking, is necessary across all organisational functions, especially concerning material organisational risks and reputation, because these silos foster independent thinking.

Social implications

The problem with the arguments proposed by the IIRC is that they aim at a one-size-fits-all approach. Not every organisation has a disconnection between strategy, governance, past performance and future prospects nor do they all have disconnected departments that need reconnecting. Therefore, a fundamental problem with <IR> is that the IIRC argues ‘why’ companies need <IR>, not ‘how’ to implement <IR>, and especially not ‘how’ to operationalise integrated thinking.

Originality/value

The paper is a must-read because it contributes to the growing debate on the benefits of <IR> by examining and critiquing an early adopter’s practice.

Details

Meditari Accountancy Research, vol. 25 no. 4
Type: Research Article
ISSN: 2049-372X

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