Towards Integrated Reporting: Concepts, Elements and Principles
Integrated Reporting is a process that results in communicating—through the annual integrated report—value creation over time. The purpose of this chapter is to introduce the idea and the logic underpinning Integrated Reporting, shed light on the reasons
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Towards Integrated Reporting: Concepts, Elements and Principles Cristiano Busco, Mark L. Frigo, Paolo Quattrone, and Angelo Riccaboni
Abstract
Integrated Reporting is a process that results in communicating—through the annual integrated report—value creation over time. The purpose of this chapter is to introduce the idea and the logic underpinning Integrated Reporting, shed light on the reasons that enabled the debate on Integrated Reporting to gain relevance over the recent years, and illustrate the features of the Consultation Draft released by the International Integrated Reporting Council on April 2013. In doing so, we focus our attention on a brief review of the fundamental concepts, content elements and guiding principles proposed within the Consultation Draft. We end the chapter with some reflections on the challenges ahead for Integrated Reporting, and on the potential impact of its adoption on the role of the management accounting function.
C. Busco (*) School of Business and Economics, National University of Ireland, Galway, Ireland e-mail: [email protected] M.L. Frigo Kellstadt Graduate School of Business & Driehaus College of Business, DePaul University, Chicago, IL, USA e-mail: [email protected] P. Quattrone University of Edinburgh Business School, Edinburgh, UK e-mail: [email protected] A. Riccaboni Department of Business Studies and Law, University of Siena, Siena, Italy e-mail: [email protected] C. Busco et al. (eds.), Integrated Reporting, DOI 10.1007/978-3-319-02168-3_1, # Springer International Publishing Switzerland 2013
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Introduction
The principles, concepts and elements that characterize the way organizations report their annual performances are currently being questioned, debated, and redesigned throughout the world1. This is happening as key notions such as capital employed, value creation, and accountability are redefined in practice. What should companies report? What are the types of capital that an organization uses and affects? To whom are organizations accountable? And again, can we currently measure, manage and communicate social and environmental impact? Is it really possible to capture and represent how value is created and sustained over time? The answers to these questions are almost certainly bedeviling a substantial number of interested managers, executives, consultants, academics, regulators and additional stakeholders everywhere around the world. A possible response to these critical questions is offered by Integrated Reporting (IR), a process that results in communicating—through an annual integrated report—how organizations create value over time, and their impact from an economic, social and environmental point of view. According to the International Integrated Reporting Council (IIRC), the IR process has the potential to shed light on these critical issues as it “brings together material information about an organization’s strategy, governance, performance and prospects in a way that reflects the commercial, social and en
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