Conceptualising the contemporary corporate value creation process

Abstract

Purpose The purpose of this paper is to examine and explain the complex interrelationships which influence the ability of firms to create value for their providers of finance and other stakeholders (loosely referred to in practice as “integrated thinking”). In doing so it examines the interrelationships between: environmental, social and governance (ESG) risk; delivering on corporate strategy; non-financial corporate reporting; and, board oversight. Design/methodology/approach Interviews were conducted with board chairs and non-executive directors of large listed companies on the Johannesburg Stock Exchange (where Boards are required to have a social and ethics sub-committee and approve integrated reports which have been mandatory since 2010) and the Australian Stock Exchange (where Board directors’ liability legislation results in Boards being reluctant to adopt integrated reporting which is voluntary). Findings The research finds that contemporary reporting processes, and in particular those set out in the King III Code and the International Integrated Reporting Framework, influence cognitive frames enhancing board oversight and assisting organisations in managing complexity. This results in increased awareness of the impact of ESG issues together with a broader view of value creation despite investor disinterest. Research limitations/implications A number of avenues of research are suggested to further examine the interrelationships identified. Practical implications The research assists the development of practice and policy by articulating and enhancing the understanding of linkages, which loosely fall under the vague practitioner term “integrated thinking”. Social implications The conceptualisation can inform national and global discussions on the appropriateness of corporate reporting and governance models to achieve sustainable development and contribute to the Sustainable Development Goals. Originality/value The paper conceptualises emerging and complex interrelationships. The cross-country comparison allows an assessment of the extent to which different national social contexts with differing governance and reporting frameworks lead to different perspectives on, and approaches to, value creation.

Rationales for integrated reporting adoption and factors impacting on the extent of adoption

“…Others highlight difficulties regarding the disclosure of forward looking information and directors' liability (Adams, 2017b;Lodhia, 2015;Steyn, 2014), determining materiality (Macias and Farfan, 2017;Steyn, 2014), difficulties of refining diverse data sources into a coherent single presentation of performance (Beck et al 2015;Lodhia, 2015;Silvestri et al, 2017) and positioning<IR> within existing corporate reporting legislation (Robertson and Samy, 2015). Themes relating to complexity and incompatibility are detailed below.…”

The interaction between institutional and stakeholder pressures: Advancing a framework for categorising carbon disclosure strategies

“…The differences in organisational responses have long been subject to scholarly investigation (e.g., Adams, ; Besharov & Smith, ; Breitbarth & Herold, ; Delmas & Toffel, ; Gibassier & Schaltegger, ; Herold, Manwa, Sen, & Wilde, ; Lee & Herold, ; Luo, Wang, & Zhang, ; Michelon, Pilonato, Ricceri, & Roberts, ; Oliver, ), and research often draws on the concept of institutional logics to explore the implications of these different responses. Institutional logics, according to Scott (), reflect “values and norms, ideas, beliefs, and meaning systems that guide the behaviour of actors” (p. 32).…”

Debate: Too close for comfort? Regulation and governance of the UK’s nuclear industry and implications for inter-generational equity

“…Universities have largely ignored global, cross-sectoral, multi-stakeholder developments in accounting for sustainability. Further, in contrast to efforts to develop 'integrated thinking' in the corporate world (Adams, 2017a), university structures and strategies continue to reflect functional and discipline silos (notwithstanding some admirable attempts to develop interdisciplinary research) and a separation of the academic from the operational. In making this statement I draw on over two decades of experience involving: cross-sectoral research in sustainability accounting and management processes and judging sustainability reports for awards; working with a number of standard-and guideline-setters to develop reporting on sustainable development issues; working as a professor and senior manager in universities; developing award-winning sustainability reports and management systems in a university; and, advising on integrated reporting and sustainability disclosures in other sectors.…”