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Open Access
Article
Publication date: 13 May 2022

Riccardo Stacchezzini, Cristina Florio, Alice Francesca Sproviero and Silvano Corbella

This paper aims to explore the reporting challenges and related organisational mechanisms of change associated with disclosing corporate risks within integrated reports.

Abstract

Purpose

This paper aims to explore the reporting challenges and related organisational mechanisms of change associated with disclosing corporate risks within integrated reports.

Design/methodology/approach

This paper adopts a Latourian performative approach to explore the organisational mechanisms of change in terms of networks of actors, both “human” and “non-human”, involved in the preparation of risk-related disclosure. Empirical evidence is collected by means of in-depth interviews with the preparers of an integrated reporting pioneer company.

Findings

Preparing disclosure on corporate risks in the context of integrated reporting demands close interaction among several actors. When disclosure shifts from listing key risks to providing information on how these risks are managed or connect with corporate strategy and value creation, departments not usually involved in corporate reporting play an active role and external stakeholders offer pertinent insights, benchmarks and feedback. Integrated reporting and risk management frameworks are the “non-human” actors that facilitate the engagement of diverse “human” actors.

Practical implications

Preparers should be aware that risk disclosure within integrated reports requires collaboration among (“human”) actors belonging to different departments and the engagement of external stakeholders. Preparers should consider the frameworks of integrated reporting and risk management as facilitators of cross-departmental discussions and dialogue, rather than mere contributors of guidelines and recommendations.

Originality/value

This study enriches the scant literature on organisational mechanisms of change made in response to integrated reporting challenges, showing subsequent advancements in the organisational process underlying the preparation of risk disclosure.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

Keywords

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

Keywords

Book part
Publication date: 3 September 2018

Ioana-Maria Dragu

This chapter investigates how integrated reporting (IR) can contribute to a better corporate social responsibility (CSR) implementation through diffusion and adoption of…

Abstract

This chapter investigates how integrated reporting (IR) can contribute to a better corporate social responsibility (CSR) implementation through diffusion and adoption of CSR practices and actually applying the CSR discourse. Based on innovation diffusion theory, we intend to analyse the diffusion and adoption of CSR on the grounds of IR. The purpose of this study is to demonstrate that IR does indeed represent a mean of reducing the gaps between CSR discourse and its implementation. In order to select the most relevant papers in the area of CSR and IR, we applied the method of positive research. Therefore, the review of literature was made by analysing various theoretical and empirical studies. Setting the main coordinates for CSR and IR through theoretical background, we continue with an empirical analysis on 23 companies that voluntarily publish integrated reports. We intend to demonstrate that IR encourages a diffusion of CSR practices, as companies become more interested in their CSR behaviour.

Details

Redefining Corporate Social Responsibility
Type: Book
ISBN: 978-1-78756-162-5

Keywords

Article
Publication date: 23 October 2021

Nick Sciulli and Desi Adhariani

It is 10 years since the International Integrated Reporting Council (IIRC) was founded and the development of the IIRC Framework has been adopted by thousands of…

Abstract

Purpose

It is 10 years since the International Integrated Reporting Council (IIRC) was founded and the development of the IIRC Framework has been adopted by thousands of organisations. This paper aims to provide empirical evidence on the motivation for the preparation of integrated reports from a diffusion of innovation (DOI) perspective.

Design/methodology/approach

Three case study organisations operating in distinct industry sectors are investigated to ascertain the motivation for the adoption of integrated reporting. DOI theory was adopted as the theoretical lens to guide the research design. An interpretative approach is used to ascertain common themes from an analysis of semi-structured interview transcripts of senior managers and directors.

Findings

The findings from these case studies support the main tenets of DOIs theory. The evidence suggests that senior executive leadership plays a significant role in commencing the integrated reporting “journey”. This study finds evidence of DOI characteristics, such as relative advantage, compatibility and observability with respect to the objectives of senior managers. The main motivations for the production of the integrated report were to demonstrate leadership and innovation to stakeholders, overcome the perceived inadequacies of the disclosures required for traditional annual reports, to enhance transparency and to satisfy the changing demands of investors and other stakeholders.

Research limitations/implications

This project captures the perceptions and views of preparers of the integrated report rather than its users. In addition, only three case study sites were investigated, therefore, generalisations would be spurious.

Practical implications

Other organisations yet to consider the production of integrated reports or to re-assess their stakeholder relationships, could use these findings to plan for their own future reporting obligations.

Originality/value

The organisations investigated were a superannuation fund, a multinational company and a charity. All are recognised leaders in their respective industries.

Details

Qualitative Research in Accounting & Management, vol. 18 no. 4/5
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 13 August 2021

Haruna Maama and Ferina Marimuthu

Given the significant role of both integrated reporting and cost of capital in the survival and prosperity of a firm, it is essential to understand their relationship by…

Abstract

Purpose

Given the significant role of both integrated reporting and cost of capital in the survival and prosperity of a firm, it is essential to understand their relationship by investigating whether integrated reporting influences the cost of capital of a firm. This research paper aims to examine the impact of integrated reporting practice on the cost of capital of listed firms in sub-Saharan Africa (SSA).

Design/methodology/approach

The study covered a period of 10 years from 2009 to 2018. One hundred and forty-seven listed firms in 10 SSA countries were used for the study. The study employed panel data analysis and utilised a dynamic estimation technique called the generalised method of moments.

Findings

The evidence shows that integrated reporting has a negative relationship with cost of capital, indicating integrated reporting can reduce firms' cost of capital. The results further showed that social, governance and environmental disclosures all have negative relationships with cost of capital, suggesting that firms that make these disclosures would have a lower cost of capital. These results are consistent with signalling theory, which holds that firms send a positive signal to the market about their performance and prospects when they provide information relating to value creation, predominantly environmental, social and governance issues.

Research limitations/implications

The major limitation of the study is the selection of only English-speaking countries. French-speaking countries may have a different reporting practice, hence a different effect on the cost of capital.

Practical implications

This study contributes to policy development on integrated reporting in SSA and informs key stakeholders involved in promoting and supporting the adoption of integrated reporting in Africa.

Originality/value

The findings from this paper consolidate existing research in integrated reporting and cost of capital by providing empirical evidence on the relationship between integrated reporting, its components and the cost of capital from emerging economies. This study contributes to the understanding of investors' reactions to integrated reporting. Further, it fills a gap in the non-availability of literature on the relative impact of the various components of integrated reporting.

Details

Journal of Applied Accounting Research, vol. 23 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 3 May 2016

Abdifatah Ahmed Haji and Mutalib Anifowose

The purpose of this paper is to examine the trend of integrated reporting (IR) practice following the introduction of an “apply or explain” IR requirement in South Africa…

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Abstract

Purpose

The purpose of this paper is to examine the trend of integrated reporting (IR) practice following the introduction of an “apply or explain” IR requirement in South Africa. In particular, the authors examine whether the IR practice is ceremonial or substantive in the context of a soft regulatory environment.

Design/methodology/approach

By way of content analyses, the authors examine the extent and quality of IR practice using an IR checklist developed based on normative understanding of existing IR guidelines. The evidence is drawn from 246 integrated reports of large South African companies over a three-year period (2011-2013), following the introduction of IR requirement in South Africa.

Findings

The results show a significant increase in the extent and quality of IR practice. The findings also reveal significant improvements in individual IR categories such as connectivity of information, materiality determination process and reliability and completeness of the integrated reports. However, despite the increasing trend and evidence of both symbolic and substantive IR practice, the authors conclude that the current IR practice is largely ceremonial in nature, produced to acquire organisational legitimacy.

Practical implications

For academics, the authors argue that there is a need to move away from the “what” and “why” aspects of the IR agenda to “how” IR should work inside organisations. In particular, academics should engage with firms through interventionist research to help firms implement integrated thinking and substantive reporting practices. For organisations, the findings draw attention to specific aspects of IR that require improvement. For policymakers, the study provides evidence based on the developmental stage of IR practice and draws attention to certain areas that need clarification. In particular, the International Integrated Reporting Council and Integrated Reporting Committee of South Africa should provide detailed guidelines on connectivity of information, material issues and disclosure of multiple capitals and their trade-offs. Finally, for educators, in line with the ACCA’s embedment of IR in its accounting courses, there is a need to incorporate IR in the curriculum; in particular, the authors argue that the best way to advance IR is in a “ubiquitous” spread in accounting and management courses.

Originality/value

This study provides empirical account of IR practice over time in the context of a regulatory IR environment. The construction of an IR checklist developed based on normative understanding of local and international IR guidelines is another novel approach of this study.

Details

Sustainability Accounting, Management and Policy Journal, vol. 7 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 5 December 2018

Riccardo Stacchezzini, Cristina Florio, Alice Francesca Sproviero and Silvano Corbella

The purpose of this paper is to investigate the intellectual capital (IC) ontology in an integrated reporting context to explore the function that integrated report (IR

1003

Abstract

Purpose

The purpose of this paper is to investigate the intellectual capital (IC) ontology in an integrated reporting context to explore the function that integrated report (IR) preparers assign to IC elements and the role of integrated thinking in this process.

Design/methodology/approach

Social ontology theory helps elucidate how an energy-sector company socially constructed an IC ontology in which IC is a core element of the value creation story told in the IR. The empirical analysis benefited from in-depth interviews with the corporate staff.

Findings

The subjective nature of IC ontology emerges, in that IC’s function is defined during the very process of IR preparation. The intangible elements drive sustainability-oriented financial value creation according to the sustainability approach embraced by the company’s business model. Integrated thinking both facilitates this perspective on IC is shared among various departments of the company and provides a procedure for scrutinising what counts as IC in this integrated reporting context.

Research limitations/implications

The research scope is limited to the IR preparation process. Further research could explore IC ontologies beyond this process.

Originality/value

This study is the first to explore IC ontology empirically within an innovative integrated reporting context. It opens paths to further research on the relationships between IC and integrated thinking.

Details

Journal of Intellectual Capital, vol. 20 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 23 July 2019

Colin Higgins, Wendy Stubbs, Dale Tweedie and Gregory McCallum

Motivated by Morgan’s (1997) analysis of the “paradoxical” role of metaphors in understanding and managing organisations, the purpose of this paper is to assess in what…

1475

Abstract

Purpose

Motivated by Morgan’s (1997) analysis of the “paradoxical” role of metaphors in understanding and managing organisations, the purpose of this paper is to assess in what respects organisations using integrated reporting (IR) are on a “journey” of organisational change.

Design/methodology/approach

The paper analyses IR practitioner literature to interpret the IR journey metaphor more precisely. The authors then use in-depth interviews to assess the extent to which this metaphor captures how six early adopter organisations in Australia implement IR, and what changes result, over four years.

Findings

The journey metaphor implies substantive and holistic organisational change. By contrast, the authors find organisations use IR in contextual, instrumental and piecemeal ways. The authors propose a “toolbox” metaphor to help (re)present how organisations adapt their reporting to fit decisions already made, and challenges presented, through ordinary and ongoing strategic management.

Research limitations/implications

Morgan (1997) stresses metaphors are invariably used to both describe and manage organisations. The authors’ analysis identifies specific ways the IR journey metaphor is descriptively misleading. The authors’ “toolbox” metaphor suggests different ways organisations are, or could, manage IR to create value.

Originality/value

This is the first paper to provide a systematic analysis of the IR journey metaphors, and to assess in what respects this metaphor captures actual organisational practice. The findings also challenge the broader notion in academic research that reporting frameworks can lead organisational change.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 6
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 2 March 2015

Roger Simnett and Anna Louise Huggins

This paper aims to provide insights into salient issues in the development of the Integrated Reporting (<IR>) Framework, and emerging issues in the implementation of this…

5469

Abstract

Purpose

This paper aims to provide insights into salient issues in the development of the Integrated Reporting (<IR>) Framework, and emerging issues in the implementation of this Framework, with the aim of identifying opportunities for future research. The International Integrated Reporting Council (IIRC) has recently produced a reporting framework for the preparation of a concise, user-oriented corporate report which expands the scope of a company’s reporting using a multiple capitals concept and requires a description of a company’s business model, allowing a better communication of its value creation proposition. To gain international acceptance, the market-based benefits of adopting the framework must be demonstrated.

Design/methodology/approach

The paper takes the form of an archival analysis of the responses to the IIRC’s public consultation phases, providing insights into arguments for and against salient aspects of the framework, and identifying issues that would benefit from future research.

Findings

Identifying issues that arose during the framework preparation, this paper identifies a range of future research opportunities and outlines the research approaches by which academics can assess the costs and benefits of companies reporting in accordance with the <IR> Framework and assuring this information.

Research limitations/implications

Research opportunities associated with the International <IR>) Framework and associated assurance are identified.

Practical implications

This paper provides insights and details of the process of adoption of <IR> and has implications for adopters and assurance providers of integrated reports, standard setters and regulators. The development of a sophisticated business case informed by rigorous research will be critical to the further uptake of <IR>.

Social implications

Research opportunities identified include the expansion of the <IR> Framework to reporting entities other than corporations, including government and not-for-profit organisations, as well as measurement and assurance of a broader array of capitals, including social capital.

Originality/value

The paper identifies <IR> research opportunities from an archival analysis of the responses to the IIRC’s public consultation phases, providing insights into arguments for and against salient aspects of the framework that would benefit from future research.

Details

Sustainability Accounting, Management and Policy Journal, vol. 6 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

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…

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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

Keywords

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