The role of integrated reporting in communicating adherence to stakeholder capitalism principles during the COVID-19 pandemic

Abstract

Purpose Stakeholder capitalism (SC) advocates that organisations should focus on creating long-term value for all key stakeholders rather than maximising short-term profits for shareholders. This paper aims to explore whether and how business organisations have applied stakeholder capitalism principles (SCPs) during the COVID-19 pandemic and how these efforts were communicated in integrated reports. Design/methodology/approach This study is based on the content analysis of the text extracted from the integrated reports of 22 companies categorised as excellent in the 2020 EY Excellence in Integrated Reporting Award 2020. The research material consisted of paragraphs that reflected how the company observed the SCPs in practice. Findings The stakeholder responsibility principle was the most represented by the examined companies, followed by the principles of continuous creation, stakeholder engagement and stakeholder cooperation. The COVID-19 pandemic has propelled the necessity of implementing innovative solutions to counteract the virus's spread. It has also spurred the need for two-way digitalised communication between the executives and stakeholders. The new situation also required collaborative approaches in the forms of partnerships, joint initiatives and programmes to ensure employee safety and help communities recover from the social and economic impacts of the pandemic. Originality/value This study links SC with integrated reporting (IR) and contributes to the literature by providing new insights into how SCPs have been applied during the COVID-19 pandemic. This discussion suggests that whereas these principles determine how the companies must act to satisfy stakeholders expectations, integrating reporting may help develop a report that is stakeholder-oriented and which responds to their information needs.

Accounting, ESG dynamics and the pandemic: when the quality of disclosure becomes crucial to sustainable success

“…Based on our proposed model, IRDS – which should represent the quality of<IR>disclosure with regard to COVID-19 pandemic impacts overall – is influenced (with significance thresholds stated in the relative table) by financial leverage, % of independent directors (%ID), % of women on the BoD, company self-assessment COVID-19 pandemic impacts on operational activities, country and belonging to high impact industries. This result confirms previous studies (Dyczkowska et al , 2022). However, a few exceptions should be mentioned.…”

“…Corporate governance characteristics, such as %ID and of Women on the Board (%W): coherently with past studies (Songini et al , 2021), the former should improve the board efficiency and efficacy overall, leading to better disclosure; on the other hand, the latter (even if this holds true if α = 10%) – due to the greater ESG sensitivity associated with women – might boost and elevate non-financial disclosure quality. This assumption is coherent with stakeholder theory (Songini et al , 2020; Csedő et al , 2022; Dyczkowska et al , 2022);…”

“…2. Ownership structure : percentage of institutional owners that hold floating equity shares within the examined company (Songini et al , 2021; Dyczkowska et al , 2022).…”

“…Moreover, it also highlights the urgency of assimilating both emerging market needs and planet needs at the corporate governance level, which, indeed, are no longer oriented towards the principle of shareholder value maximization. The <IR> managed to overcome some of the traditional reporting tool limitations, bridging the gaps between corporate reporting and stakeholders’ needs (Dyczkowska et al , 2022; Roberts et al , 2022). The aim of <IR> is to bring together material information about an organization’s strategy, governance, performance and prospects from an economic, social and environmental perspective.…”

“…As far as <IR> quality and its determinants are concerned, the debate about its quality is, however, still open (Songini et al , 2021). Previous literature focused on the quality of both the whole report and some specific aspects (Dyczkowska et al , 2022). Different facets of <IR> quality have been analysed by authors, mainly applying a content analysis methodology through a wide range of items and scoring systems (Songini et al , 2021).…”