Corporate culture as a driver of integrated reporting

An organisation’s values, mission, vision, and management choices can help its journey towards integrated thinking and reporting.
Corporate culture as a driver of integrated reporting

Founded on a process of integrated thinking, integrated reporting results in communication of how an organisation’s strategy, governance, performance, and prospects, in the context of its external environment, lead to the creation of value in the short, medium, and long term.

Academic research and professional bodies have devoted increased attention to the implementation of integrated thinking and reporting practices by companies, specifically looking at both the drivers and the consequences of its adoption. Our CIMA-funded research project, The Role of Corporate Culture in the Choice of Integrated Reporting, explores whether the adoption of integrated thinking and reporting practices can benefit from a specific organisational cultural orientation. For the project, we implemented a conceptual content analysis of companies’ reports and conducted interviews with integrated reporting preparers across different geographical areas and business sectors.

The key question we addressed in our research is: What role does corporate culture play in the decision to prepare an integrated report? We focused on two pillars for every organisation. On one side, the corporate reporting choice: a company can publish an annual report and/or a sustainability report and/or an integrated report. Our focus has been on the latter — we identified a sample of European listed companies that published integrated reports between 2014 and 2016.

The other pillar is corporate culture — collective values, beliefs, and assumptions that influence organisational, group, and individual behaviour. Culture can be internally or externally oriented, shared amongst the members of an organisation, and can be a source of sustainable competitive advantage.

Findings and implications for practice

Our findings show that corporate culture is a key driver of corporate reporting choices and an essential ingredient of the reporting journey. A culture with a higher level of collaboration, teamwork, talent management, empowerment, and interpersonal relationships (a collaboration-oriented culture) leads to a more integrated decision-making process. In the context of integrated reporting, organisations that have a control-oriented culture dominated by rule, system, and procedure are more likely to publish an integrated report. Overall, internal culture orientation (control and/or collaboration) can aid the journey towards integrated thinking and reporting.

This raises an important question: Can organisations use or shape their corporate culture in a way that facilitates the implementation of integrated reporting? Based on our findings, the answer seems to be yes indeed. Investing in cultural initiatives that boost collaboration and control can help the adoption of integrated thinking and integrated reporting, respectively.

Our research also highlights that integrated reporting preparers perceive that there are a number of benefits from embarking on the integrated reporting journey. Among others, it helps them understand what is going well or not, boosts collaboration and awareness of the business model, and builds reputation. It allows silos to break down, makes the business more resilient, and encourages long-term thinking.

Our findings suggest that a company’s journey towards integrated thinking and reporting can benefit from an investment in corporate culture, specifically towards internal orientation. Both for companies that are willing to embark on the integrated reporting journey, as well as those that are already reporting in an integrated way and trying to reap the benefits from integration, the findings indicate that initiatives boosting internal-oriented culture can act as an internal lever to enhance integration in the decision-making process, therefore maximising the benefits.


We draw three main conclusions:

  • There is a clear and consolidated awareness of the benefits derived from integration as perceived by integrated reporting preparers, suggesting that investing in the integrated thinking and reporting journey is worthwhile.
  • Unobservable company characteristics like corporate culture play a crucial role in the implementation of integrated thinking and reporting practices. This implies that not only observable characteristics (eg, size, profitability, governance, industry, etc.) but also nonobservable ones (eg, corporate culture) need to be considered when studying and/or introducing a new reporting tool.
  • Initiatives towards a collaborative culture that requires an exchange of data, ideas, and communication can create a fertile background for integrated thinking; a control-oriented culture that values policies, processes, and procedures can help the adoption of integrated reporting.

Further information on the research can be found here.

Irma Malafronte, Ph.D., is a chartered accountant and senior lecturer in accounting and finance at Roehampton Business School, London. John Pereira, ACMA, CGMA, Ph.D., is associate professor in finance at Kingston Business School, London. Cristiano Busco, Ph.D., is professor of accounting and integrated reporting at Roehampton Business School, London, and professor of accounting at LUISS Guido Carli University, Rome. To comment on this article or to suggest an idea for another article, contact Oliver Rowe, an FM magazine senior editor, at