Rationales for integrated reporting adoption and factors impacting on the extent of adoption: A UK perspective

Abstract

Purpose

The purpose of this paper is to investigate rationales for integrated reporting (<IR>) adoption and factors that impact on the extent of adoption in the UK early adopter organisations. Diffusion of innovation theory was used as a guiding theoretical lens

Design/methodology/approach

The study was based on in-depth semi-structured interviews with 36 senior executives actively involved in IR in finance, sustainability, communications and legal functions within seventeen organisations. A content analysis of the interviews was undertaken using qualitative coding techniques within Nvivo 11 software.

Findings

Organisations drew on a wide range of rationales for adoption, with a predominance of sociological over economic rationales, both of which offered organisations a relative advantage over existing practices. Economically, <IR> emerged as an incremental process, which filled a performance gap is predominantly manufacturing and utility industries with significant impacts on the environment/society. Predominant sociological rationales were: external pressures, primarily due to perceptions of shifts in societal expectations; and internal aspirations relating to enhancing reputation. Findings also revealed that the <IR> framework was not fully adopted by the majority of organisations, primarily due to incompatibility with organisational requirements and/or perceived complexity of the framework.

Research limitations/implications

This research study was limited by the small sample of organisations that participated, although significant efforts were made to ensure that the sample incorporated the majority of early adopter UK organisations who demonstrated best practice in <IR>.

Practical implications

Recommendations on how the adoption of <IR> may be further enhanced in the future are outlined.

Social implications

Research that provides recommendations to inform policy and practice regarding how <IR> could be more widely adopted, and its practices further diffused, within organisations is important given <IR> has the potential to contribute to societal and environmental well-being.

Originality/value

This study is significant as research into <IR> adoption decision motivations and subsequent extent of adoption is scant, particularly in the UK. It responds to the call by Dumay et al. (2016) for <IR> researchers to engage more with practice. It further enriches prior research on the adoption of management innovations where an extensive body of innovation literature has focussed on the rationale for organisational adoption of management innovations but has neglected the subsequent extent of adoption.

Citation

Robertson, F.A. and Samy, M. (2020), "Rationales for integrated reporting adoption and factors impacting on the extent of adoption: A UK perspective", Sustainability Accounting, Management and Policy Journal, Vol. 11 No. 2, pp. 351-382. https://doi.org/10.1108/SAMPJ-02-2019-0042