Reporting challenges and organisational mechanisms of change: a Latourian perspective on risk disclosure of a pioneer company in integrated reporting

Abstract

Purpose This paper aims to explore the reporting challenges and related organisational mechanisms of change associated with disclosing corporate risks within integrated reports. Design/methodology/approach This paper adopts a Latourian performative approach to explore the organisational mechanisms of change in terms of networks of actors, both “human” and “non-human”, involved in the preparation of risk-related disclosure. Empirical evidence is collected by means of in-depth interviews with the preparers of an integrated reporting pioneer company. Findings Preparing disclosure on corporate risks in the context of integrated reporting demands close interaction among several actors. When disclosure shifts from listing key risks to providing information on how these risks are managed or connect with corporate strategy and value creation, departments not usually involved in corporate reporting play an active role and external stakeholders offer pertinent insights, benchmarks and feedback. Integrated reporting and risk management frameworks are the “non-human” actors that facilitate the engagement of diverse “human” actors. Practical implications Preparers should be aware that risk disclosure within integrated reports requires collaboration among (“human”) actors belonging to different departments and the engagement of external stakeholders. Preparers should consider the frameworks of integrated reporting and risk management as facilitators of cross-departmental discussions and dialogue, rather than mere contributors of guidelines and recommendations. Originality/value This study enriches the scant literature on organisational mechanisms of change made in response to integrated reporting challenges, showing subsequent advancements in the organisational process underlying the preparation of risk disclosure.

Guest editorial: Integrated reporting and change: what are the impacts after more than a decade of integrated reporting?

“…However, since the advent of integrated reporting, much of the research has been uncritical and often supportive of the IIRC and its rhetoric (Dumay et al , 2016). Hence, this special issue helps to break that trend with two papers examining performative integrated reporting (de Graaff and Steens, 2023; Stacchezzini et al , 2023) and two papers using a critical management framework (de Villiers and Dimes, 2023; Pigatto et al , 2023). While we have answered the call for more critical research, what next?…”

“…Their paper demonstrates that it is not the report that generates the benefits for the company but the underlying process behind gathering the information that raises awareness and management action to mitigate organisational risk. They conclude that report preparers “should consider the frameworks of integrated reporting and risk management as facilitators of cross-departmental discussions and dialogue, rather than mere contributors of guidelines and recommendations” (Stacchezzini et al , 2023, p. 1). Their findings echo those of intellectual capital reporting research, which clearly show that organisations are more concerned with internal rather than external benefits (Mouritsen et al , 2001; Nielsen et al , 2017; Dumay et al , 2020).…”

“…The second paper by Stacchezzini et al (2023) concerns an Italian company that was an early adopter of integrated reporting. In this paper, the authors demonstrate how the company does achieve benefits through the internal processes leading up to integrated reporting.…”

The relevance of integrated reporting in future standard setting of the International Sustainability Standards Board

“…Vitolla and Raimo (2018) found that the adoption of <IR> provides benefits internally by being more inclusive and also externally by improving relationships with significant stakeholders. This also speaks to the value derived from the internal processes leading up to the actual report and not the report itself (Stacchezzini et al, 2023). One of the most profound benefits is that Barth et al (2017) determined that there is a positive relationship between integrated reporting quality and organizational value, which includes liquidity, prediction of future cash flows, and investment efficiency.…”