Corporate and Integrated Reporting: A Functional Perspective

Robert G. Eccles; George  Serafeim

Chapter | Corporate Stewardship | 2015

Corporate and Integrated Reporting: A Functional Perspective

by Robert G. Eccles and George Serafeim

Abstract

In this chapter, we present the two primary functions of corporate reporting (information and transformation) and why currently isolated financial and sustainability reporting are not likely to effectively perform these functions. We describe the concept of integrated reporting and why integrated reporting could be a superior mechanism to perform these functions. We will also argue that integrated reporting can contribute to more effective corporate stewardship. Moreover, we discuss, through a series of case studies, what constitutes an effective integrated report (Coca-Cola Hellenic Bottling Company) and the role of regulation in integrated reporting (Anglo-American).

Keywords: Information; Integrated Corporate Reporting; Transformation;

Format: Print

SSRN

Citation:

Eccles, Robert G., and George Serafeim. "Corporate and Integrated Reporting: A Functional Perspective." In Corporate Stewardship: Achieving Sustainable Effectiveness, edited by Susan Albers Mohrman, James O'Toole, and Edward E. Lawler. Sheffield, UK: Greenleaf Publishing, 2015.

The case describes the challenges that UBS faced as a result of the U.S. Department of Justice (DOJ) investigation for tax fraud, that claimed that UBS had helped some 52,000 U.S. residents hide billions of dollars in untaxed assets in secret Swiss accounts between 2000 and 2007, depriving the U.S. Treasury of hundreds of millions of dollars in taxes. Why did this happen inside UBS? What were the incentives and the corporate governance failures that led to these events? How should the board of directors of UBS respond to the requests of the tax and regulatory authorities?

As sustainability issues, also labelled environmental, social, and governance (ESG) issues, become financially material, companies, investors, and regulators are designing strategies and policies to improve sustainability disclosure and performance. In this paper, we outline a framework of how sustainability issues become financially material arguing that materiality is not a “state of being” but a “process of becoming.” Our framework could assist companies and investors to make resource allocation decisions based on expectations about future materiality, social entrepreneurs and NGOs to develop their theories of social change, and policy makers to design disclosure regulations. Moreover, our framework generates predictions about the conditions under which sustainability issues become financial material that could be empirically tested in the future.

Faculty & Research

Corporate and Integrated Reporting: A Functional Perspective

Abstract

Citation:

About the Author

More from the Author