Integrated Reporting: disclosure practices and determinants of the adoption

An Integrated Report (IR) is a single document whose primary purpose is to explain how an organization creates value over time. IR represents an innovative form of corporate disclosure as it manifests distinctive features that distinguish it from traditional form of financial and non-financial reporting. The supporters of IR believe that it will bring greater transparency on firms’ commitment toward sustainability. In spite of this, previous studies show that voluntary disclosure on sustainability is used as a “symbolic practice” to alter public perception on corporate behavior and some scholars argue that IR is likely to be the same. The purpose of the thesis is to understand if IR is conceived as a reporting strategy to advance corporate image. The research is based on two level of analysis: firstly, it analyzes the determinants of its adoption to support (or reject) previous findings of the accounting literature ascribing the voluntary reporting on sustainability to legitimacy needs; secondly, it analyzes the disclosure practices of early adopters to understand if firms use the IR disclosure opportunistically to alter public perceptions of firms behaviors. Data collection is based on public information. In particular, archival data on corporate characteristics have been collected from Bloomberg Database whilst data on disclosure characteristics have been manually collected from the reports available in the official IR database. Data analysis method is quantitative and based on multivariate statistical regression models. The results revel that the adoption of IR is not a matter of legitimation merely ascribing to pressures arising from the external environment. However the disclosure practices of early adopters show that IR is used to advance corporate image. Overall, we interpret these results as consistent with the idea that being IR a form of voluntary disclosure with few exceptions (cf. South Africa) firms do not participate to the IIRC project to face legitimacy threats arising from a negative public perception of their behavior; however, once that they got in the IIRC project , they take advantage of their high degree of discretion by reporting information that emphasizes their own best interests.