Investment considerations and impressions of integrated reporting

2018 ◽  
Vol 9 (1) ◽  
pp. 2-28 ◽  
Author(s):  
Pei-Chi Kelly Hsiao ◽  
Martin Kelly
Keyword(s):  
Private Information ◽  
Firm Value ◽  
Information Needs ◽  
Investment Decisions ◽  
Capital Allocation ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Content Type ◽  
Investment Appraisal ◽  
Reporting Framework

Purpose Integrated reporting (IR) aims to improve the quality of information available to capital providers. While IR is associated with decreases in investor uncertainty and increases in firm value, it is unclear how IR information directly influences investment decisions. This paper aims to investigate the investment considerations of Taiwanese investors and their initial impressions of the International Integrated Reporting Framework (IIRC Framework). In doing so, this study examines the relationships between investment considerations and the IIRC Framework’s concepts. Design/methodology/approach Semi-structured interviews were undertaken with 16 investors in Taiwan. Thematic analysis was used to analyse the data collected. Findings In addition to economic and financial outlook, competitive advantages and ownership structure, Taiwanese investors emphasise management credibility as an important factor that influences investment decisions. Investors are reliant on private information sources and quantitative data. Sustainability disclosures and sustainability performance beyond legal requirements are often not considered. Taiwanese investors lack awareness of the IIRC Framework and are sceptical about the premise that integrated reports can provide information material to investment appraisal. The assertion that integrated reports reduce information asymmetry and influence investment decisions has to be treated with caution. Research limitations/implications Self-selection bias and a potential lack of transferability in the findings are issues inherent in the research method and sample used. Practical implications IR information needs to be frequently updated rather than disclosed in a periodic report. Furthermore, integrated reports need to demonstrate a direct link between non-financial performance and financial value creation. Social implications Mandating the supply of integrated reports is unlikely to influence investors’ capital allocation decisions unless investor demand is a driver of the regulation. Originality/value This study is one of the few to investigate IR from the investor’s perspective. Observations from this preliminary study warrant further investigations into the relevance of IR to investment communities globally.

Integrated reporting and integrated thinking in Italian public sector organisations

2017 ◽  
Vol 25 (4) ◽  
pp. 553-573 ◽  
Author(s):  
James Guthrie ◽  
Francesca Manes-Rossi ◽  
Rebecca Levy Orelli
Keyword(s):  
Public Sector ◽  
Processes Of Change ◽  
Press Releases ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Content Type ◽  
Early Adopters ◽  
Academic Literature ◽  
Reporting Framework ◽  
History Of

Purpose This paper aims to explore the linkages between integrated reporting (IR) and organisations’ internal processes, specifically focusing on investigating the internal mechanisms of change that can lead organisations to adopt IR disclosure and how this impacts on integrated thinking internally. Design/methodology/approach The paper draws upon previous analysis and insights provided in the IR academic literature, as well as analysing several directives, policy and framework pronouncements. The study also draws on the management accounting change literature, using it as a lens to observe early adopters’ practice. In addition, it provides detailed case studies considering the internal processes of change in five early adopters of the integrated reporting framework (<IRF>) and whether the adoption leads to internal “integrated thinking”. Five Italian public sector organisations are analysed, and the authors make use of official documents, press releases and in-depth semi-structured interviews with the major internal actors. Findings The research highlights that the processes of change in organisations adopting IR is their adoption of a way of thinking, that is, integrated thinking, as a result of the process of internalisation. Research limitations/implications Given the short history of IR, this sample is small due to the small number of early adopters. Originality/value The paper provides academics and policymakers with insights into the process of change to be considered while adopting the <IRF> and responds to calls in the IR literature for further field-based studies on IR’s impact on internal processes. Also, the paper highlights that the European Directive on the disclosure of non-financial and diversity information (2014/95/EU) has the potential to increase environmental, social and governance disclosures amongst European companies.

Is voluntary International Integrated Reporting Framework adoption a step on the sustainability road and does adoption matter to capital markets?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pei-Chi Kelly Hsiao ◽  
Charl de Villiers ◽  
Tom Scott
Keyword(s):  
Capital Markets ◽  
Firm Value ◽  
Sensitivity Analyses ◽  
Incremental Innovation ◽  
Integrated Reporting ◽  
Content Type ◽  
Reporting Practices ◽  
Reporting Framework ◽  
Sustainability Practices ◽  
Is Value

Purpose This paper aims to examine the type of firms that voluntarily adopt the International Integrated Reporting Framework (IIRF) and how markets respond to voluntary IIRF adherence. Design/methodology/approach Analysis of a matched global sample of listed firms that voluntarily adopt the IIRF (IIRF firms) and those that do not (non-IIRF firms). The samples range from 188 to 436 observations as alternative research designs, different matched samples and regression specifications, and several sensitivity analyses were conducted. Findings In markets where integrated reporting (IR) is not mainstream, voluntary IIRF adoption is more likely for firms with established sustainability practices. Such findings suggest that the IIRF is an incremental innovation for sustainability rather than an innovation that radically changes management and reporting practices. In Japan, where IR is mainstream, results show no observable differences between IIRF firms and non-IIRF firms. Consistent with the determinants results, this paper finds no evidence of associations between voluntary IIRF adoption and the information environment, the cost of equity or firm value. However, the additional analysis provides preliminary evidence suggesting capital market effects may differ for IIRF firms with higher sustainability or market performance. Practical implications This study offers useful insights into the current global debate on whether there is value in adopting the IIRF. Originality/value This study adds to the limited body of research on the determinants and consequences of voluntary IIRF adoption, offering insights for regulators, practitioners and proponents of IR. This study is the first to provide quantitative evidence of the influence sustainability practices have on voluntary IIRF adoption. Further, the results add to the current global debate on whether there is value in adopting the IIRF. This paper finds that voluntary IIRF adoption has no clear and distinct influence on disclosure practices and capital markets, suggesting there are no additional benefits from prioritising the promotion or adoption of the IIRF over other disclosure forms. Unless there are advancements supporting the implementation of integrated thinking and information connectivity, the potential for the IIRF to improve information quality may be limited to encouraging more non-financial disclosure and transparency in countries where integrated disclosures are not trending.

The influence of integrated reporting and stakeholder information needs on the disclosure of social information in a state-owned enterprise

2019 ◽  
Vol 27 (4) ◽  
pp. 556-579 ◽  
Author(s):  
Federica Farneti ◽  
Federica Casonato ◽  
Monica Montecalvo ◽  
Charl de Villiers
Keyword(s):  
Empirical Evidence ◽  
Information Needs ◽  
Single Case ◽  
Social Information ◽  
Annual Reports ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Content Type ◽  
Stakeholder Relations ◽  
Before And After

Purpose The purpose of this study is to examine how social disclosures are influenced by the adoption of integrated reporting (IR), focusing on the three social capitals in the international IR framework, namely, intellectual, human and social and relationship capital. Design/methodology/approach This study takes the form of a single case study involving content analyses of annual reports and integrated reports from 2009 to 2017 (i.e. before and after IR adoption in 2013), as well as in-depth, semi-structured interviews with key preparers of the integrated report at New Zealand Post, to study changes in disclosures towards different stakeholder groups, from an internal organisation perspective. The empirical evidence is analysed through the lens of stakeholder theory. Findings This study provides empirical evidence that contributes to our understanding of IR’s influence on the disclosure of social information and enhanced stakeholder relations in a public sector context. The study shows that the IR framework promoted a materiality assessment approach with stakeholders, which led to a reduction in social disclosures, while the materiality focus led to the disclosure of social matters more relevant to stakeholders. Social implications IR led to meaningful stakeholder engagement, which led to social disclosure that are more relevant to stakeholders. Originality/value This study assesses the influence of IR on social disclosures. The findings will be of interest to organisations seeking to enhance stakeholder relations and/or undertake IR and/or social disclosures.

Management of risks associated with the disclosure of future-oriented information in integrated reports

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
A.M.I. Lakshan ◽  
Mary Low ◽  
Charl de Villiers
Keyword(s):  
Performance Management ◽  
Thematic Analysis ◽  
Capital Allocation ◽  
Research Literature ◽  
Individual Responsibility ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Content Type ◽  
Ex Post ◽  
Management Procedures

Purpose Integrated reporting (IR) promotes the disclosure of future-oriented information to enable financial stakeholders to make better-informed decisions. However, the downside to this type of disclosure is the risk to management of disclosing such future-oriented information. This paper aims to explore how IR preparers manage the risk of disclosing future-oriented information in companies’ integrated reports. Design/methodology/approach This study represents an exploratory interpretative thematic analysis of 33 semi-structured interviews with managers involved in IR in eight Sri Lankan companies representing various industries. The thematic analysis is informed by the research literature and prior studies on IR. Findings This paper provides evidence of various strategies to manage the risk associated with the disclosure of future-oriented information in integrated reports. These strategies include making non-specific predictions; increasing the accuracy of the predictions; linking performance management to disclosed targets, thus ensuring individual responsibility for target achievement; disclosing ex post explanations for not achieving previously disclosed targets; and linking disclosed targets to the company’s risk management procedures. However, these strategies can cause managers to provide conservative future-oriented information, rather than “best estimate” future-oriented information. Practical implications The study describes the strategies that managers use to mitigate the risks involved in disclosing future-oriented information. These strategies can provide support or raise concerns, for managers in deciding how to deal with such risks. Regulators tasked with investor protection, as well as stock exchanges interested in the transparency and accountability of listed companies’ activities should be aware of these strategies. Furthermore, the International Integrated Reporting Council (IIRC) should be interested in the implications of this study because some of the identified strategies could undermine the usefulness of integrated reports to stakeholders. This is a significant concern given that the IIRC envisages integrated reporting and thinking as vehicles that could align capital allocation and corporate behaviour with wider sustainable development goals. Social implications The trend of future-oriented information moving from being used only in organisations’ internal management systems to being externally reported in integrated reports has implications for stakeholder groups interested in the reported targets. This study reveals management strategies that could affect future-oriented information reliability and reduce their usefulness for users of integrated reports. Originality/value This study provides unique insights into the emerging area of how managers deal with the risks involved in disclosing future-oriented IR information.

scholarly journals User-driven efforts in creating knowledge graph information system

2020 ◽  
Vol 36 (2) ◽  
pp. 97-111
Author(s):  
Stanislava Gardasevic
Keyword(s):  
Information System ◽  
Information Seeking ◽  
Information Needs ◽  
Resource Discovery ◽  
The Body ◽  
Knowledge Graph ◽  
Structured Interviews ◽  
Community Members ◽  
Study Objective ◽  
Content Type

Purpose This paper presents the results of a qualitative study that involved students of an interdisciplinary PhD program. The study objective was to gather requirements to create a knowledge graph information system. The purpose of this study was to determine information-seeking practices and information needs of this community, to inform the functionalities of a proposed system, intended to help students with relevant resource discovery and decision-making. Design/methodology/approach The study design included semi-structured interviews with eight members of the community, followed by a website usability study with the same student participants. Findings Two main information-seeking styles are recognized and reported through user personas of international and domestic (USA) students. The findings show that the useful information resides within the community and not so much on the program website. Students rely on peer communication, although they report lack of opportunities to connect. Students’ information needs and information seeking are dependent on their progress through the program, as well as their motivation and the projected timeline. Practical implications Considering the current information needs and practices, a knowledge graph hosting both information on social networks and the knowledge produced by the activities of the community members would be useful. By recording data on their activities (for example, collaboration with professors and coursework), students would reveal further useful system functionalities and facilitate transfer of tacit knowledge. Originality/value Aside from the practical value of this research that is directly influencing the design of a system, it contributes to the body of knowledge on interdisciplinary PhD programs.

The financial consequences of human capital disclosure as part of integrated reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Antonio Salvi ◽  
Nicola Raimo ◽  
Felice Petruzzella ◽  
Filippo Vitolla
Keyword(s):  
Human Capital ◽  
Firm Value ◽  
Fixed Effects ◽  
Cost Of Capital ◽  
Positive Impact ◽  
Firm Risk ◽  
Integrated Reporting ◽  
Content Type ◽  
Financial Consequences ◽  
The Cost

PurposeThe purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.Design/methodology/approachA manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.FindingsThe empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.Originality/valueThis study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.

Issues and challenges of IFRS 9 in Malaysian Islamic financial institutions: recognition criteria perspective

2021 ◽  
Vol 12 (2) ◽  
pp. 239-257
Author(s):  
Marziana Madah Marzuki ◽  
Abdul Rahim Abdul Rahman ◽  
Ainulashikin Marzuki ◽  
Nathasa Mazna Ramli ◽  
Wan Amalina Wan Abdullah
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Business Models ◽  
Fair Value ◽  
Financial Instruments ◽  
Structured Interviews ◽  
Content Type ◽  
Reporting Framework ◽  
Islamic Financial Institutions ◽  
Ifrs 9

Purpose The purpose of this paper is to investigate the effects and challenges of the new amendment of International Financial Reporting Standards (IFRS) 9 in Malaysia from the perspectives of regulators, auditors, accountants and academicians in Malaysian Islamic financial institutions. For the purpose of this study, this paper focuses on the recognition criteria perspective of the standard, which provides a basic understanding of the financial reporting framework. Design/methodology/approach Using 10 series of semi-structured interviews undertaken with key individuals in regulatory bodies, audit companies, full-fledged Malaysian Islamic Banks and Malaysian higher learning institutions. Findings The findings revealed that IFRS 9 strengthens International Accounting Standards 39 in terms of relevance and reliability, recognition of financial instruments and identification of business models. Nevertheless, Islamic financial institutions face challenges in terms of a faithful representation of fair value, substance over form, identification of financial instruments before recognition criteria and the extent of the role of risk management in reducing manipulation in identifying business models. Research limitations/implications This study provides implications to regulators and standard setters in Malaysia to enhance the quality of financial reporting framework and practices in Islamic financial institutions in this country using IFRS 9. Practical implications Practically, the findings of this study can be used by the regulators to resolve the issues that arise in adopting IFRS 9 among Islamic financial institutions to further enhance financial reporting quality. Originality/value The findings of this study are very important to ensure that the adoption of IFRS among Islamic financial institutions are in line with Sharīʿah principles. To date, no studies have been done on the challenges of adopting IFRS 9 among Islamic financial institutions in Malaysia.

Adoption of integrated reporting in Sri Lanka: coverage and trend

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thilini Cooray ◽  
Samanthi Senaratne ◽  
Nuwan Gunarathne ◽  
Roshan Herath ◽  
Dileepa Neelangi Samudrage
Keyword(s):  
Sri Lanka ◽  
Design Methodology ◽  
The Other ◽  
Sri Lankan ◽  
Legitimacy Theory ◽  
Integrated Reporting ◽  
Content Type ◽  
Disclosure Requirements ◽  
Comprehensive Index ◽  
Reporting Framework

Purpose This paper aims to examine the coverage of and trends in reporting content elements in the integrated reports of the Sri Lankan companies following the International Integrated Reporting Framework (IIRF). Design/methodology/approach Based on a comprehensive checklist developed on the content elements of the IIRF, 171 corporate integrated reports were content-analyzed over a period of three years. The results were theorized subsequently using the legitimacy theory. Findings The study identifies that the extent of and trend in the coverage of content elements of the IIRF have increased during the period under consideration despite some under-addressed areas. It indicates that Sri Lankan companies are making progress in the preparation of integrated reports in line with the IIRF, which provides evidence in support of both strategic and institutional perspectives of the legitimacy theory because of the proactive actions taken by managers to acquire legitimacy along with the other normative and mimetic pressures available in the IR landscape. Originality/value This is one of the first studies that evaluate the compliance of IR adopters with the IIRF overtime in the entirety of a single country. It also develops a comprehensive index to capture the disclosure requirements of IR and extends the analysis to a voluntary context using both strategic and institutional perspectives of the legitimacy theory.

Top ten South African companies’ disclosure of materiality determination process and material issues in integrated reports

2018 ◽  
Vol 19 (2) ◽  
pp. 230-247 ◽  
Author(s):  
Natasja Steenkamp
Keyword(s):  
South African ◽  
Environmental Issues ◽  
Integrated Reporting ◽  
Content Type ◽  
Sustainable Performance ◽  
Award Winning ◽  
Reporting Framework ◽  
Determination Process ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this paper is to develop guidelines of what award winning companies, leading practice in integrated reporting (IR) disclose in their integrated reports about material issues and their materiality determination processes. Also, to provide insight into what they disclose about their perception of materiality. Design/methodology/approach A content analysis was conducted to investigate what the top 10 South African companies of the 2015 Ernst and Young Excellence in Integrated Reporting Awards disclosed in their 2014 and 2015 integrated reports about their materiality determination processes, material issues and what materiality means to them. Thematic analyses were conducted in developing guidelines. Findings All except one company applied the International Integrated Reporting Framework. The materiality determination processes, material issues and companies’ descriptions of materiality are diverse. Material issues most companies identified relate to employees, social and environmental issues, customers and sustainable performance. Practical implications The proposed guidelines will provide useful strategies for organisations embarking on the IR journey about what issues could be considered as material and therefore included in integrated reports. It also proposes activities companies can undertake to identify, evaluate and prioritise material issues and execute their materiality determination process. Originality/value This paper is the first to develop guidelines of material matters and materiality determination processes. It also adds to existing literature on IR practice and the application of materiality.

Managing material value creation matters in integrated reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Natasja Steenkamp ◽  
Roslyn Roberts
Keyword(s):  
South African ◽  
Value Creation ◽  
Design Methodology ◽  
Qualitative Approach ◽  
The Body ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Process Information ◽  
Content Type ◽  
Body Of Knowledge

Purpose This paper aims to explore how advanced integrated report preparers internalise and operationalise material value creation information to manage the generation of such information for the integrated report. Design/methodology/approach The paper adopts a qualitative approach using in-depth semi-structured interviews to examine how information about material value creation matters in six South African organisations are managed. Findings The findings will be useful to integrated reporting adopters as to how they might implement appropriate processes and systems to determine, communicate, collect and process information about matters that substantively affect their value creation. Originality/value The paper contributes to the body of knowledge by providing insight on how material value creation matters are determined, communicated internally and information about such matters generated.

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