Linking integrated reporting quality with sustainability performance and financial performance in South Africa

Mans-Kemp, Nadia; Lugt, Cornelis T. van der

doi:10.4102/sajems.v23i1.3572

Cited by 28 publications

(15 citation statements)

References 45 publications

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“…Ecological disasters, social imbalances, financial crises and financial scandals have provided evidence of the fragility and lack of information provided by companies to allow an adequate evaluation of their sustainability in surroundings that are more and more complex every day [10,[30][31][32]. This has led people to question the quality of the information given to interest groups and has motivated companies to voluntarily prepare sustainability reports as a way of complementing financial information and showing greater social and environmental commitment [8,10,[33][34].…”

Section: Literature Reviewmentioning

confidence: 99%

Why Integrated Reporting? Insights from Early Adoption in an Emerging Economy

et al. 2022

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The purpose of this research is to contribute new and relevant information about the early adoption of integrated reporting in an emerging economy, in this case the Chilean economy, with emphasis on the reasons for its use, the perceived benefits, and the difficulties experienced during the process of adoption. Methodologically, this work uses a qualitative approach, utilising semi-structured interviews as a data collection instrument that are applied to the managers in charge of preparing this reporting for a sample of companies that trade on the Chilean stock exchange. These interviews were interpreted using an analysis of their content. The results obtained are in accordance with the literature and the empirical evidence, with the characteristics belonging to an emerging economy and highlighting the importance of communicating with the stakeholders. The relationship with the stakeholders and the inclusion in international contexts were the most valued. It is also highlighted that all of the companies analysed declare sustainability as a strategic focus, which is an infrequent situation in developing economies. One limitation of this work is the low valuation and use that market agents still assign to integrated reporting in Chile, which affects the degree of preparation and utilisation, and could be explained by other types of incentives and motivations.

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Section: Literature Reviewmentioning

confidence: 99%

Why Integrated Reporting? Insights from Early Adoption in an Emerging Economy

et al. 2022

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“…[36,49] found that there is growing utilization of integrated reporting in South Africa and Sri Lanka, but both studies suggested that there are concerns with respect to the content and quality of these reports. On the one hand, [3,50,51] found evidence of a significant and positive effect between revealed information in integrated reporting and financial performance. On the other hand, [52], using data from 35 countries, found that revealed information by integrated reporting reduces agency costs and problems.…”

Section: Nowadaysmentioning

confidence: 99%

“…Recent financial scandals and the global financial crisis have generated numerous criticisms of the value and use of the annual financial and sustainability reports prepared by companies [1][2][3]. The scarce strategic evaluation of their results [4,5] has affected the adequate evaluation of true drivers of corporate value [6].…”

Section: Introductionmentioning

confidence: 99%

Integrated Reporting as an Academic Research Concept in the Area of Business

et al. 2021

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Recent financial scandals and the global financial crisis have generated numerous criticisms of the value and use of annual financial and sustainability reports prepared by companies. This has generated the elaboration and use of a new model of corporate-information reporting that considers strategic, social, economic, and environmental aspects. This study synthesizes the knowledge of the use of integrated reporting as a source of information, and bibliometrically analyzes of 268 articles published in the Web of Science database in 2011–2019. Results show that 77.6% of the academic articles were from developed countries, and the five most influential countries are Italy, South Africa, Australia, the United Kingdom, and the United States. Results show that the development of this type of research is scarce in emerging economies. The most influential authors are García, Rodríguez, and De Villiers. A high level of interconnections is observed in used keywords, of which the most used are ‘sustainability’ and ‘management’. Lastly, this article contributes to the international discussion on integrated reporting by carrying out a structured review of the literature, highlighting previous research.

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“…It is suggested that companies (especially their investors) with high IRC are generally not rewarded in financial terms and that there is a possibility that companies with a high level of IRC may still fail to effectively link sustainability performance with financial performance. Mans-Kemp and Van der Lugt (2020) suggested that future research on IRC should rather focus on the quality of reporting (and not the mere quantity and compliance with core elements of integrated reporting) by applying the IIRC ( 2013) principles, such as strategic focus. The present study, therefore, incorporated these recommendations by assessing the quality of disclosures on the alignment between KPIs and CEO LTI objectives -therefore assessing the strategic focus and integrated thinking applied in executive remuneration practices.…”

Section: Relationship Between Chief Executive Officer Remuneration and Company Performance Indicatorsmentioning

confidence: 99%

“…Awards commencing in 2013(Mans-Kemp & Van der Lugt 2020, the present study applied the 2014 year as starting date owing to integrated reporting practices assumed to have been established in South Africa in 2014. There were 28 companies (of the original sample of 34 companies) that met the requirements relevant for testing the second secondary https://www.jefjournal.org.zaOpen Access research objective.Subsequent to finalising the sample companies, the CEOs of each company during the specified period were identified by scrutinising the relevant annual financial statement or integrated report.…”

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confidence: 99%

Alignment of executive long-term remuneration and company key performance indicators: An exploratory study

Wyk

Wesson

2021

Journal of Economic and Financial Sciences

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Orientation: Executive remuneration remains a controversial topic. A major concern is the perceived misalignment of executive remuneration with company performance. Key performance indicators (KPIs) represent the strategic focus areas that drive a company’s performance. Aligning executive remuneration, especially the long-term incentives (LTIs), with KPIs is, therefore, paramount in attaining company performance objectives.Research purpose: This study assessed the alignment of chief executive officer (CEO) LTI objectives and company KPIs for mining companies listed on the Johannesburg Stock Exchange (JSE).Motivation for the study: Prior research focused mainly on the relationship between short-term executive remuneration and company performance. The present study provides insights into the composition of CEO remuneration and whether CEO LTI objectives are aligned with company strategy.Research approach/design and method: The sample comprised 34 mining companies for the period 2010–2016. A standardised methodology was applied to measure LTIs and statistical techniques (descriptive statistics and a ratings analysis) were applied to assess the alignment between CEO LTI objectives and company KPIs.Main findings: Chief executive officer remuneration showed an increasing trend, with LTIs contributing more towards total CEO remuneration towards the end of the research period. A weak to moderate alignment was found between CEO LTI objectives and company KPIs.Practical/managerial implications: Improved, transparent governance is required to address the opaque disclosure on the alignment between company KPIs and the objectives of CEO LTIs.Contribution/value-add: The study demonstrated that annual (and integrated) report disclosures generally do not clearly describe company strategy (reflected by KPIs) nor is the link between KPIs and CEO LTI objectives always evident. Stakeholders thus may well question whether CEO remuneration is aligned to attaining sustainable company performance.

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Linking integrated reporting quality with sustainability performance and financial performance in South Africa

Cited by 28 publications

References 45 publications

Why Integrated Reporting? Insights from Early Adoption in an Emerging Economy

Why Integrated Reporting? Insights from Early Adoption in an Emerging Economy

Integrated Reporting as an Academic Research Concept in the Area of Business

Alignment of executive long-term remuneration and company key performance indicators: An exploratory study

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