Corporate culture as a driver of integrated reporting

Based on an integrated thinking process, integrated reporting makes it possible to communicate on how the strategy, governance, performance and outlook of an organization, in the context of its external environment, lead to the creation of value in the short term. , medium and long term.

Academic research and professional bodies have paid increased attention to the implementation of integrated thinking and reporting practices by companies, specifically examining both the drivers and consequences of its adoption. Our research project funded by CIMA, The role of corporate culture in the choice of integrated reporting, explores whether the adoption of integrated thinking and reporting practices can benefit from a specific organizational cultural orientation. For the project, we implemented a conceptual analysis of the content of company reports and conducted interviews with integrated report preparers in different geographies and industries.

The key question we addressed in our research is: what role does corporate culture play in the decision to prepare an integrated report? We focused on two pillars for each organization. On the one hand, the choice of corporate reporting: a company can publish an annual report and / or a sustainable development report and / or an integrated report. We focused on the latter – we identified a sample of European listed companies that published integrated reports between 2014 and 2016.

The other pillar is corporate culture – the collective values, beliefs and assumptions that influence organizational, group and individual behavior. Culture can be inward or outward oriented, shared among members of an organization, and can be a source of sustainable competitive advantage.

Results and implications for practice

Our results show that corporate culture is a key driver of corporate reporting choices and an essential ingredient in the reporting journey. A culture with a higher level of collaboration, teamwork, talent management, empowerment, and people-to-people relationships (a collaborative culture) leads to a more integrated decision-making process. In the context of integrated reporting, organizations that have a control culture dominated by rule, system and procedure are more likely to publish an integrated report. Overall, the orientation of the internal culture (control and / or collaboration) can facilitate the path towards integrated thinking and reporting.

This raises an important question: Can organizations use or shape their corporate culture in a way that facilitates the implementation of integrated reporting? Based on our findings, the answer appears to be yes indeed. Investing in cultural initiatives that strengthen collaboration and control can help the adoption of integrated thinking and integrated reporting, respectively.

Our research also highlights that integrated report preparers perceive that there are a number of advantages to embarking on the integrated reporting process. Among other things, it helps them understand what is going well and what is not, stimulates collaboration and knowledge of the business model and strengthens reputation. It breaks down silos, makes the business more resilient, and encourages long-term thinking.

Our results suggest that a company’s journey towards integrated thinking and reporting can benefit from investing in corporate culture, in particular towards internal orientation. Both for companies wishing to embark on the integrated reporting process and for those already reporting in an integrated manner and trying to reap the benefits of integration, the results indicate that initiatives that boost internal culture can act as a leverage to strengthen integration into the decision-making process, thereby maximizing benefits.


We draw three main conclusions:

  • There is a clear and consolidated awareness of the benefits derived from integration as perceived by integrated report preparers, which suggests that it is worth investing in the integrated thinking and reporting journey. .
  • Unobservable characteristics of the business, such as corporate culture, play a crucial role in implementing integrated thinking and reporting practices. This implies that not only observable characteristics (e.g. size, profitability, governance, industry, etc.) but also unobservable characteristics (e.g. corporate culture) need to be taken into account when considering study and / or the introduction of a new reporting tool.
  • Initiatives towards a collaborative culture that require an exchange of data, ideas and communication can create a fertile ground for integrated thinking; a control culture that values ​​policies, processes and procedures can help the adoption of integrated reporting.

Further research information can be found here.

Irma Malafronte, Ph.D., is a Chartered Accountant and Senior Lecturer in Accounting and Finance at Roehampton Business School, London. John pereira, ACMA, CGMA, Ph.D., is Associate Professor of Finance at Kingston Business School, London. Cristiano Busco, Ph.D., is Professor of Accounting and Integrated Reporting at Roehampton Business School in London and Professor of Accounting at LUISS Guido Carli University in Rome. To comment on this article or suggest an idea for another article, contact Oliver Rowe, a FM editor-in-chief of the magazine, at [email protected].

Previous Principle of transparency of corporate governance: Disclosure of compensation received by directors or trustees
Next Why does the corporate culture in Africa prohibit dreadlocks, tattoos and indigenous traditional clothing?