Integrated reporting by South African companies: a case study

Abstract

Investors and stakeholders rely on high-quality integrated reports to obtain social, environmental and ethical information for decision-making. A striking weakness found in recent research on integrated reports is the way certain items of social, environmental and ethical information are excluded while other items are repeated. There is accordingly much confusion, clutter and fragmentation in the integrated reporting landscape. There are as yet no reports on the long-term effect of mandatory integrated reporting on the quality of information. Through a detailed content review of the information companies report on, more insight can be gained into this question five years after the mandatory implementation of King III, which requires companies to provide integrated reports. The study used a similar approach to that of Solomon and Maroun (2012), reviewing the integrated reports of four companies with high social and environmental impact, over a period of three years (2012 to 2014). The companies" integrated reports were reviewed in terms of social, environmental and ethical items. The results indicate that there has been a distinct decrease in the amount of information provided in integrated reports but, more importantly, there still exists significant uncertainty as to the amount of reporting that is required. The results of this study provides evidence that regulators may have to provide more detailed guidelines as to the reporting duties of companies. It also indicates to 1 managers that their approach to integrated reporting may have to be revised to ensure useful information is provided to stakeholders.

A practice theoretical analysis of the irrelevance of integrated reporting to mainstream sell‐side analysts

“…Hence, we argue that acceptance of IR as an unbiased source of information would require widespread adoption of IR and visible and sustained improvements across companies in the disclosure of material matters that have negative consequences (see Lai et al ., ). Recent evidence that the language used in integrated reports impairs readability (Du Toit, ) and the amount of information provided in integrated reports is decreasing (Du Toit et al ., ) suggests the need for significant improvement in the adherence to the spirit of the IR Framework.…”

The Influence of Integrated Reporting on Business Model and Strategy Disclosures

“…Despite the increase in the volume of disclosure, key aspects of disclosure are poorly incorporated, financial and non‐financial information are discussed in silos, and disclosures are generic and not company specific (Du Toit et al. ; Haji and Anifowose ; Robertson and Samy ). Companies are increasingly conforming to the reporting language in the IR Framework (Haji and Hossain ), but the introduction of IR has not stimulated new innovation in disclosure mechanisms (Stubbs and Higgins, ).…”

Qualitative accounting research: dispelling myths and developing a new research agenda

“…For example, the interpretive accounting community has devoted considerable attention to explaining how integrated reporting can be used to reinforce an organisation's social, economic and environmental objectives (Gibassier et al ., ; Vesty et al ., ); engage more effectively with stakeholders (Lodhia, ; Lai et al ., ); and promote a more integrated approach to business management (Guthrie et al ., ; Al‐Htaybat and von Alberti‐Alhtaybat, ). In concert, there have also been critiques of integrated reporting that offer recommendations on how to improve the guidelines or their practice (Brown and Dillard, ; Dumay et al ., ; McNally et al ., ; du Toit et al ., ). As explained by Broadbent and Unerman (, p. 15):

When social and environmental dimensions are coupled with the financial dimensions flowing from an organisational strategy, decision, or action, a much more complex situation is highlighted.

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