Barriers to Implementing the International Integrated Reporting Framework: A Contemporary Academic Perspective

Purpose: This paper is motivated by the International Integrated Reporting Council’s (IIRC) call for feedback from all stakeholders with knowledge of the International Integrated Reporting Framework , and specifically of the enablers, incentives and barriers to its implementation. The paper synthesises insights from contemporary accounting research into integrated reporting (IR) as a general concept, and integrated reporting as espoused by the IIRC in the (IIRC, 2013). We specifically focus on possible barriers and emphasise the specific issues we feel could be rectified to advance the , along with the areas that may potentially hinder wider adoption and implementation. Design/methodology/approach: The paper draws upon and synthesises academic analysis and insights provided in the IR and academic literature as well as various directives, policy and framework pronouncements. Findings: The flexibility and lack of prescription concerning actual disclosures and metrics in the could allow it to be used for compliance, regardless of the other benefits lauded by the IIRC. Thus we see forces, both external and internal, driving adoption, with one prominent example being the European Union Directive on non-financial reporting. Because of the different ways in which IR is understood and enacted, there are numerous theoretical and empirical challenges for academics. Our paper highlights potential areas for further robust academic research, and the need to contribute to policy and practice. Research limitations/implications: The paper provides the IIRC, academics, regulators and reporting organisations with insights into current practice and the framework. We highlight the need for further development and evidence to help inform improvements both from a policy and a practice perspective. A key limitation of our work is that we draw upon a synthesis of the existing literature which is still in an early stage of development. Originality/value: The paper provides the IIRC with several insights into the current , and specifically with the enablers, incentives and barriers to its implementation. Also, it provides academic researchers with a number of important observations and an agenda upon which they can build their future research

Audit within the corporate governance paradigm: a cornerstone built on shifting sand?:a cornerstone built on shifting sand?

This paper is a case study-based investigation of aspects of the current paradigmatic approach to ‘good’ corporate governance with its focus on the interlinked roles of internal control and risk management procedures, internal audit and external audit, overseen and co-ordinated by a formal structure of board committees, in particular the audit committee. The evidence that we adduce from the study of four high-profile cases of perceived accounting and governance failure provides limited assurance that this approach will in fact be cost-effective or efficient in preventing further such cases of accounting and governance failure. Specifically, issues as to remuneration and fee dependence; lack of relevant knowledge and expertise; and social and psychological dependence upon executive management appear to have significantly and negatively affected the quality of decision-making of governance gatekeepers. This suggests that further consideration of relevant economic, institutional and cognitive/behavioural factors beyond the rational choice model of traditional economics should underpin future developments in required modes and structures of governance

The Implementation of Integrating Reporting <IR> in SMEs. Insights from a pioneering experience in Italy

Abstract Purpose – This paper aims to discuss the most critical aspects relative to the “usability” of the International Integrated Reporting Council (IIRC) Framework faced by small and medium-sized enterprises (SMEs) in releasing the integrated report and adapting the Integrated Reporting (IR) principles (i.e. materiality, integrated thinking and connectivity) to their needs and features. Only recently the relevance of IR for SMEs has been internationally acknowledged. Design/methodology/approach – The study is based on both a deductive and inductive approach. The first one is founded on a literature and technical review aimed at tracing the theoretical background and the framework on integrating reporting in SMEs. The second one is empirically constructed and follows the action research approach because it involves the analysis of a single case-study relative to a company – Costa Edutainment Spa that released its pioneering integrated report in 2014 – belonging to the Italian Network on Business Reporting, a working group which has been involved in the pivotal drafting process of a Guidance for IR in SMEs. Findings – Results emphasise the main criticalities faced by an SME in the IR process, namely, the need for the following: clearly defining the relationship between sustainability and integrated reporting; adapting the main IR concepts (such us materiality, integrated thinking and connectivity) and fully understanding the benefits deriving from the implementation of IR. Moreover, results shed light on the usefulness of a simplified and operative guidance for releasing the integrated report within SMEs the effectiveness deriving from the direct involvement in the NIBR working group and the provision of practical examples and suggestions. Research limitations/implications – The main limitations are due to the fact that the empirical analysis is related to a single case study, and it is explorative in nature. Consequently, results are not generalisable. However, the work contributes to nourish the debate on the benefits and critical issues relative to the diffusion of IR among SMEs in a research field which has not been adequately investigated and to develop reflections on the benefits of the diffusion of the IR among SMEs, pointing out the opportunity to follow an evolutionary path which drives the evolution of the entrepreneurial and organisational culture towards monitoring, assessing and reporting the company’s value process creation. Practical implications – The work contributes to triggering the debate on the diffusion of IR among SMEs which represents a research field that remains still under investigated. It points out a fundamental gap on how to implement IR in SMEs and operationalise the IIRC concepts and principles. It develops reflections on the critical issues and benefits of the diffusion of the IR among SMEs. Drawing from a pioneering experience, the work contributes to supporting entrepreneurs by emphasising the possible benefits deriving from the implementation of the IR process. It suggests an evolutionary path through different steps (starting from the business model definition) which are necessary to drive the entrepreneurial and organisational culture towards monitoring, assessing and reporting the SMEs’ value process creation. Originality/value – The work contributes to devoting the attention of both scholars and practitioners to an underestimated research field – the “feasibility of IR in the SMEs context – which has not been yet adequately investigated. Moreover, being empirically based, it helps in supporting the diffusion of the IRframework among SMEs, practitioners and consultants by providing insights aimed to improve the IR Guidance for SMEs and sensitise entrepreneurs by emphasising that a possible step-by-step “IR journey” is possible

Social Network Influences on Integrated Reporting adoption and implementation – A UK Perspective

Abstract Purpose This paper sought to investigate social network influences on UK Integrated Reporting () adoption and implementation. Design/methodology/approach The study was based on in-depth semi-structured interviews with 36 senior executives actively involved in within 17 organisations. Findings Main social network influences on adoption externally were report design consultants, and to a lesser extent, external auditors, primarily to legitimize . Internal influences were board support for , with the main driver being the mind-set of the CFO/Chairman to drive sustainability throughout the organisation, or to regain societal trust. Social network influences aiding further diffusion at the implementation stage came from three external sources: business networks; report design consultants; and external auditor. Internal influences in driving diffusion within organisations were identified in five functional areas, with Finance, Sustainability and Communications functions exerting greatest external influence on the diffusion of . Research Limitations This research study was limited by the small sample of organisations that participated, although significant efforts were made to ensure that the sample incorporated the majority of early adopter UK organisations who demonstrated best practice in . Therefore, the findings are specific to the research context and do not represent statistical generalisations. Practical implications Empirical evidence identifying social network influences from a practitioner perspective provide recommendations as to how may be further diffused in the future. Social Implications creates the potential to significantly improve the long-term health of corporations and the external environment they impact through consideration of the three indivisible and integrated dimensions of sustainable development, the economy, society, and the environment and can contribute to a sustainable society by providing the opportunity for organizations to respond to the UN Sustainable Development Goals. This highlights the significance of research which aims to gain insights into social network influences which can assist in the adoption and implementation of . Originality/value This is the first comprehensive study of social network influences on the adoption and implementation practices in UK. It incorporates recommendations to improve the likelihood of subsequent adoption and diffusion of based on the findings