Reshaping Risk Disclosure through Integrated Reporting: Evidence from Italian Early Adopters

Rossi, Francesca Manes; Nicolò, Giuseppe; Orelli, Rebecca Levy

doi:10.5539/ijbm.v12n10p11

Cited by 30 publications

(30 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…According to the content analysis results, these companies earned a comparatively higher score for risk-related questions in the IRQ index. Thus, having a separate risk committee helps to closely oversee the current and potential risks and improve the quality of risk disclosure in IR [127,128].…”

Section: Accepted [68-70] -mentioning

confidence: 99%

Does Corporate Governance Affect the Quality of Integrated Reporting?

2020

View full text Add to dashboard Cite

This study examines how governance mechanisms affect the quality of integrated reporting (IR), which is fast emerging both as a tool to help firms understand their value creation process and to communicate effectively with external stakeholders. This study first developed an index to assess the quality of integrated reports. Subsequently, 132 integrated reports of Sri Lankan public listed companies selected over a three-year period were content analysed. The hypotheses formulated on the relationship between corporate governance and the quality of IR based on the agency theory were analysed using multivariate linear regression and panel regression. The results show that there is limited support from the corporate governance system for providing quality information to stakeholders on the value creation process through IR, except for board size and the availability of a separate risk management committee. This is the result of the heavy emphasis of corporate governance requirements and the resulting mechanisms of Sri Lankan companies on mandatory corporate reporting requirements compared to a voluntary reporting model such as IR. Since many corporate governance aspects are meant to fulfill mandatory reporting requirements, the results imply that the directors have given limited attention to providing quality information through voluntary disclosure practices such as IR, although they use resources to prepare integrated reports.

show abstract

Section: Accepted [68-70] -mentioning

confidence: 99%

Does Corporate Governance Affect the Quality of Integrated Reporting?

2020

View full text Add to dashboard Cite

show abstract

“…A further strand of research turned to the determinants and effects of IR (García-Sánchez et al, 2013;Frías-Aceituno et al, 2013a, 2013b, 2015Girella et al, 2019). Several studies discuss the effects of IR disclosures on investors and financial markets (Barth et al, 2016;Zhou et al, 2017), with some paying specific attention to risk disclosure (Marx and Mohammadali-Haji, 2014;Moolman et al, 2016;Raemaekers et al, 2016;Manes-Rossi et al, 2017). An analysis of South African companies pinpoints the "possibility of reporting on the governance of risk being a compliance-based exercise rather than an example of effective stakeholder communication" (Raemaekers et al, 2016, p. 41).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Investigating risk disclosures in Italian integrated reports

Guthrie¹,

Rossi

Orelli

et al. 2020

MEDAR

Self Cite

View full text Add to dashboard Cite

Purpose The paper identifies the types of risks disclosed by Italian organisations using integrated reporting (IR). This paper aims to understand the level and features of risk disclosure with the adoption of IR. Design/methodology/approach The authors use risk classifications already provided in the literature to develop a content analysis of Italian organisations’ integrated reports published. Findings The content analysis reveals that most of the Italian organisations incorporate many types of risk disclosure into their integrated reports. Organisations use this alternative form of reporting to communicate risk differently from how they disclose risks in traditional annual financial reporting. That is, the study finds that the organisations use their integrated reports to disclose a broader group of risks, related to the environment and society, and do so using narrative and visual representation. Originality/value The paper contributes to a narrow stream of research investigating risk disclosure provided through IR, contributing to the understanding of the role of IR in representing an organisational risk.

show abstract

“…Achieving IT is not an easy task (Dumay and Dai, 2017). It involves understanding the context in which an entity operates (Al-Htaybat and von Alberti-Alhtaybat, 2018), and the connections between capital and value creation according to the proposed business model and without losing sight of risks and opportunities (Moolman et al, 2016;Manes-Rossi et al, 2017) in financial and non-financial terms (IFAC, 2015). Maintaining a forward-looking orientation is also required (CIMA, 2017).…”

Section: Conceptual Framework: Public Sector Sustainability Reporting Integrated Reporting and Integrated Thinkingmentioning

confidence: 99%

Integrated thinking in the reporting of public sector enterprises: a proposal of contents

Valencia

Cordobés-Madueño

Lozano

et al. 2019

MEDAR

View full text Add to dashboard Cite

Purpose The purpose of this study is to explore how preparers of non-financial information in the public sector report on the integrated thinking (IT) concept proposed in the integrated reporting (IR) initiative. This concept has not been sufficiently examined, and there is no consensus regarding its meaning. In addition, the elements required to put IT into practice have not been empirically investigated. Specifically, given its relevance in the creation of public value, IT in the field of public sector enterprises is analysed. Design/methodology/approach To this end, content analysis of a sample of IR reports prepared by state-owned entities is performed with the aim of identifying which aspects offer opportunities for improvement with respect to transparency and sustainability. Findings The results show empirical evidence on the relevance of the dimensions considered for IT. However, IT is not yet fully implemented in reporting of the studied organizations despite its importance in the IR framework. Regarding the links between IR information and the process of value creation and strategy, the results reveal that in the external approach dimension connections of the environment and the business model with value creation are relatively frequent. However, connections related to commitment to stakeholder demands are infrequent. Research limitations/implications The study has limitations that are primarily related to the small number of sampled companies, which makes it difficult to generalize the conclusions regarding the commitment of organizations to IT. Second, all the dimensions and variables of IT were equally weighted given the lack of weighting information that should be used in IT index construction. Therefore, the index may not be an accurate measure of the commitment of the public entities analysed to this holistic way of thinking. In addition, this study did not take into account other factors that could influence reporting, such as industry or administrative culture, and all public enterprises in the sample were treated as if reporting demands in the public sector were homogeneous regardless of the environment in which they operate. Finally, this study assumes that the quantity of information disseminated through the report about IT variables is an indicator of the degree of adoption of a holistic thinking. However, IT also requires internal management processes and management behaviours which, in fact, are not always reflected in the reports. This could challenge the internal coherence of the quantity of information disseminated through the report as a measure. Practical implications This study’s findings have implications for the reporting of public sector enterprises. From the point of view of preparers, the findings show which aspects were taken into account to reflect IT in the report. Adhariani and De Villiers (2019) consider it a key aspect that preparers should prioritize in preparing the report. The study’s results show that many opportunities exist for improving the content of the nonfinancial information reports and providing evidence about the implementation of IT in public sector reporting. Moreover, this study can help standard setters and practitioners guide the content of reporting by public entities, and thus improving their stakeholder relations, accountability, transparency and credibility. In addition, the results may be interesting for legislators and policymakers when determining what regulatory information should be mandatory for public enterprises. Finally, IT can help governments and public managers identify relevant aspects in the generation of public value and legitimize their actions. Originality/value Apart from contributing to the clarification of the IT concept, this study empirically analyses how it is being made visible in the reports prepared by public enterprises that currently follow the IR conceptual framework. The results of this analysis can contribute to improving transparency and accountability. In addition, the findings also have implications for sustainability development, as they reveal not only what aspects should be considered in IT but also how to make it operational. The results show that internal processes should be better coordinated and that there is a need of greater involvement of the managers with nonfinancial aspects. Furthermore, information should be more interconnected. All previous would improve the perception that citizens have of the future sustainability of public entities. Specifically, the findings have direct implications for reporting. First, we improve the understanding of IT by clarifying the elements that are to be integrated. The research findings on these aspects that show a holistic vision of the organization have practical implications for preparers who can gain a deeper understanding of the elements and how they should be incorporated in the reports and taking into account that connectivity should be a relevant issue.

show abstract

Reshaping Risk Disclosure through Integrated Reporting: Evidence from Italian Early Adopters

Cited by 30 publications

References 36 publications

Does Corporate Governance Affect the Quality of Integrated Reporting?

Does Corporate Governance Affect the Quality of Integrated Reporting?

Investigating risk disclosures in Italian integrated reports

Integrated thinking in the reporting of public sector enterprises: a proposal of contents

Contact Info

Product

Resources

About