The aim of this paper is to investigate social and environmental stakeholders' perspectives on the usefulness of Integrated Reporting (IR) to their decision-making processes, and from such perceptions assess its value in delivering accountability for an organisation's wider impacts on non-financial capitals.
We adopt a qualitative research design and interpretivist mode of inquiry to understand social and environmental stakeholders' views of IR to inform their decision-making. We conducted in-depth semi-structured interviews with 14 senior representatives of Australian stakeholders of a large well-known financial services organisation. We focused on those stakeholders that represent human, social and relationship and natural capitals. These stakeholders represent Australian and international-based NGOs with significant campaigns on climate change, employment, human rights and ethics and transparency. They review and comment on the content of a “best practice” published integrated report with which they are familiar.
Through rich narrative examples, stakeholders reveal beliefs about a range of information shortfalls and absences – lack of detail and clarity, information selectivity, spin and bias, comparability and completeness. The stakeholders already knew more information than the IR contained, and consequently stated it was not usable, and not used by them. IR was acknowledged as a basic public commitment of an accountability relationship, but stakeholders revealed that the commitments that organisations can make public through formal reports lack the transparency, detail and honesty that they require. Accountability is revealed as an ongoing process of engagement and dialogue and seen to require insight “off the record” behind closed doors. Private meetings and partnerships, and other ongoing direct engagement with companies were seen as a more effective but still limited means of (private) accountability.
In distinct contrast to much (quantitative and normative) IR literature on report content, preparers, assurors, standard-setters and investors, we focus on what engaged non-financial stakeholders say about IR practice. Their responses raise questions about how public non-financial reporting practice is able to demonstrate stewardship and accountability for wider organisational impacts on non-financial capital. Stakeholders stress the importance of continuing engagement, dialogue and “becoming informed” to make up for information absences. No matter how comprehensive and scrupulously prepared, organisational reports were judged insufficient. Transparency was said to occur, and corporate authenticity tested, through a form of “civil-society triangulation”. Our study illustrates stakeholders operate in networks, sharing information from multiple sources, and building information mosaics that seek to confirm and “proof” corporate disclosure, actions, intentions and performance. To probe the limits of corporate disclosure in delivering accountability, then, we see considerable potential for more in-depth case studies of such practices.
