Non-financial reporting and company financial performance: a systematic literature review and integrated framework

Abstract

PurposeThe purpose of this paper is to examine the different aspects of non-financial reporting that may influence company financial performance. In particular, the authors present an integrated framework of these features that have a direct impact on the financial sustainability of firms for future researchers to further explore and expand the boundaries of the domain.Design/methodology/approachA systematic literature review of peer-reviewed papers, covering the period 2015–2020, was done, and 41 paper were identified and analysed via a thematic review, to identify variables that either positively or negatively impact on the financial performance of listed companies. The literature focuses on disclosures related to integrated reporting disclosures, sustainability disclosures (also called corporate social responsibility (CSR) disclosures) and corporate governance disclosures. A synthesised inter-textual coherence strategy has been followed during the interpretation of the findings.FindingsThe results of the synthesised inter-textual coherence strategy were the development of an integrated framework, which indicates that the inclusion of control variables in regression analysis has no impact on the direction of the relationship between quality reporting and financial reporting.Originality/valueTo the best of the authors’ knowledge, this paper is the first to provide a comparison between the impact of the different types of reporting and financial sustainability.

Talent management and firm performance in emerging markets: a systematic literature review and framework

“…Aligning with this principle, we chose to apply to our study the SLR methodology, which has recently been applied in studies published in top-tier management journals such as Journal of Management (Castañer and Oliveira, 2020), Academy of Management Annals (Aguinis et al, 2018), International Journal of Management Reviews (Nofal et al, 2018), Journal of World Business (Christofi et al, 2021). Specifically, an SLR is based on a revision of present research on one or more formulated questions that apply a clear method to identify, choose and critically examine research (Crous et al, 2022;Grant and Booth, 2009), and it often offers scholars and experts a framework that integrates extant knowledge (e.g. Christofi et al, 2019a;Dada, 2018;Nofal et al, 2018;Williams et al, 2021).…”

Company-Level Factors of Non-Financial Reporting Quality under a Mandatory Regime: A Systematic Review of Empirical Evidence in the European Union

“…The borrowed capital ratio (BCR) is used by credit analysts to determine the creditworthiness of a company, considering that a higher value points to higher financial risk. According to Crous et al [32], we expect a positive relationship between leverage and integrated reporting quality, considering that companies under debt pressure will also be incentivized to be more transparent about their sustainability risks. Dragomir et al [41] identified a moderate positive correlation between BCR and NFRQ.…”

“…Another important finding is that the quality of overall ESG management is a positive factor of the quality of non-financial reporting [12]. From another perspective, companies in environmentally sensitive industries tend to issue higher-quality external reports [32]. However, the focus on integrated reporting and various other frameworks (such as the GRI Standards) is marginally relevant to the effects of mandatory non-financial reporting under the NFRD in the European Union.…”

“…In systematic reviews, company-level factors were analyzed in relation to non-financial reporting formats and quality. The focal variables included ESG management [12], environmentally sensitive industries [32], company size [14], profitability as a measure of financial performance [14], governance structures [15,18], the existence of the sustainability committee [13], board independence [14], directors' expertise, board diversity, and frequency of board meetings [14]. These studies reflected various periods, pre-NFRD or during-NFRD applicability (starting with the financial year 2017).…”

The evolution of integrated popular financial reporting: toward a digital-driven collaborative approach using sentiment analysis tool

“…Further investigations of French companies revealed that reporting quality mitigates inefficiencies related to information needs and that governance can drive change through established reporting processes (Houcine et al, 2022). In addition, an organisation's non-financial dimensions directly impact financial sustainability, suggesting an integrated framework to EMJB be explored in the future (Crous et al, 2022). In a public management context, among the different types of social reporting capable of involving all actors by placing the citizen at the centre of the decision-making process (Biondi and Bracci, 2018), Integrated Popular Financial Reports (IPFR) or Popular Reports are the main ones that best suit informational needs, change, and accounting by associating the tool with new disruptive technologies (Grossi et al, 2021).…”