The (r)evolution of integrated reporting
Authors:   , de Graaff Brigitte Catharina 
Published: June 2023

Since the foundation of the International Integrated Reporting Council
(IIRC) in 2010, the concept of integrated reporting (IR) has gained widespread
attention. The IR Framework as first published by the IIRC in 2013 aims to
fulfil stakeholders’ demands by providing an overview in which all strands
of information, and their attendant impact on the value creation process,
are connected in the integrated report. Although the integrated report is
an important outcome of IR, this product should ultimately be based on the
process of integrated thinking. Integrated thinking fulfils a pivotal role in
the integrated reporting process, but most of the attention has been given
to the report as a product rather than to integrated thinking as a key internal
process. The impact of IR adoption on the organisation internally, and the
degree to which integrated thinking becomes visible in the organisation, has
thus far remained underexposed.

This dissertation studies the extent to which IR affects the observable
presence of integrated thinking within performance management systems
(PMSs). Through recourse to legitimacy theory and management fashion theory, a
preliminary assessment of the development of IR is provided. The uncovered
genealogy of claims about potential benefits of IR are explored in more detail
by administering a survey among Dutch supervisory board members (SBMs).
Both the perceived benefits of IR and the factors that influence the motives of
SBMs to advocate for a change towards IR implementation are explored. The
results also stress the iterative process that is taking place between IR and
integrated thinking practices.

Some of the claims about IR pertained to topics such as: the breaking
down of silos within organisations, improved decision-making, better
alignment between financial and non-financial information, and an overall
more holistic business approach. These claims describe aspects which can be
encompassed under the umbrella of integrated thinking. In this dissertation,
integrated thinking is approached from a management control perspective.
Through conducting case studies with four Dutch companies that have
multiple years of experience with publishing integrated reports, it becomes
apparent that each of the organisations experienced changes in their PMSs
due to IR.

The results of this dissertation show that due to IR implementation,
integrated thinking is becoming visible in the PMSs, because PMSs are
becoming more integrated with respect to financials and non-financials.
This study also shows the iterative process between the concepts of IR and
integrated thinking. These changing PMSs are in alignment (at least partially)
with the espoused benefits of IR outlined in literature. Such an overview of
the IR journey is expedient for both academics studying the concept of IR,
and practitioners seeking a more complete understanding of what they can
expect from IR implementation and what they can learn about the impact of
IR and use of integrated thinking in practice. It also helps standard setters’,
regulators’ and consultants’ attempts to provide more guidance to companies
aiming to better understand the phenomenon of integrated thinking.