Bringing Change In Corporate Reporting Through Integration Accounting Essay

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Syed M. Zubair Azam, Khalid Mehmood Warraich, and Sajid Hussain AwanAbstract-The economic crisis which started a few years back is not showing any signs of recovery. Researchers, scholars and practitioners have found two main reasons of this scenario. First, lack of proper measurement of the outcomes of each organizational decision and second reason is the lack of assured transparency within the companies. To get companies more transparent, and to win stakeholder's trust, companies need to communicate their actions and level of commitment to incorporate sustainability into every organizational decision. This research paper proposes that to bring assured transparency and to win stakeholder trust, companies should integrate financial and non-financial performance reports and thus should produce One Report. The paper presents an annotated literature review which covers conceptual foundations of One Report, drivers, prospective benefits to both stakeholders as well as to companies, and prospective challenges that companies can face in the adoption of One Report. Survey has been conducted to assess important factors that practitioners consider while making judgment about a company, useful metrics to be included in an annual report and prospective benefits on one report. Descriptive statistical techniques are employed and on the basis of findings, it has been discussed that how business schools can incorporate the sustainability topic into the curriculum. A roadmap for adoption of one report has also been suggested. Finally, managerial implications and future research areas have been identified.

Key Terms-One Report, Sustainability, Transparency, Integration of financial & non-financial performance reports.


The era of global recession is not showing any signs to come to a close. However, some economies are showing the signs of growth. And thus governments, organizations, associations and communities are now trying to find out the reasons of this collapse of financial system and then how to cope with such challenges in the future. Two aspects have emerged from this scenario. One is Measurement of each organizational activity and second is Transparency (Eccles, & Krzus, 2010). Measurement of each activity means justifying every investment or spending with outcome, while transparency inside the organizations includes not only clearness and lucidity but communicating your level and actions of transparency. In short, executive's acceptance of being held accountable and thus communicating every action for sustainable results.

There is a shift from "survival of the fittest" to "survival of the most informed". And four drivers accelerating the pace of this shift are globalization, instant communications, organized civil society and now a crisis in trust. These drivers have changed the rules of the game. Now the world wants something holistic and that's why terms like Green management, Green marketing, Sustainability, and Holistic Business Models have been introduced (KPMG International, 2010). To better inform every stakeholder, several companies have come up with issuing sustainability reports based on triple bottom line principle which captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. This study seeks to examine the prospects whether managers are willing to adapt or adopt this upcoming trend or not? And if yes then what could be the challenges or benefits associated with this change? In the end, scale of change in organizations about corporate reporting would also be explored.

As integrated report is quite a new and emerging phenomenon, however, sufficient research is not available, so documents from different domains have been reviewed, a review of case studies has been conducted, and survey method, interviews and document reviewing has been adopted for data collection. Following the data collection, the study seeks to identify the possible outcomes and that how they can be used to help accelerate the change process and how can they be utilized by the right minds at the right time.

Back Ground of the Study

With the dramatic expansion of information communication technology (ICT), and the desire for increased competitiveness in corporations, there has been an increase in the use of computing power to produce unified reports which put different views of the enterprise in one place (Robert, 2007). The evolution of integrated reporting over the years has been quite significant. From the starting point of mandatory annual reports, reporting then took a further step forward with environmental reports. It then embraced a more holistic approach with an advent of the sustainability reporting based on Triple Bottom Line Principle (Economic, social and environment) as pioneered by many large multinational corporations like Shell in 1992 (Oates, 2009). The latest development in corporate reporting is Integrated Report, also known as One Report.

Integrated report or one report refers to a document online or printed that contains the integrated representation of a company's performance in terms of both financial and non-financial results (Eccles & Krzus, 2010). In the King III Report (also known as King Code of Governance for South Africa, 2009), integrated reporting is referred to as: "A key challenge for leadership is to make sustainability issues mainstream. Strategy, risk, performance and sustainability have become inseparable; hence the phrase 'integrated reporting' which is used throughout this Report" (Iodsa, 2009, p. 11).

Companies that have incorporated integrated reports in their system include BASF, Phillips, Novo Nordisk, United Technologies Corporation (UTC) and American Electric Power (AEP). In 2008, United Technologies Corporation was the first Dow Jones Industrial Average member to produce an integrated report. Denmark was the very first country which made it mandatory for all companies to issue an Integrated Report (Danish Ministry of Trade & Investment, 2006). The prime minister of UK, Mr. Gordon Brown also announced the same order in 2005 but cancelled it later because of cost cutting strategy. However, it has been re-announced in 2009. Johannesburg Stock Exchange (JSE) has also announced that integrated Report is a new requirement for Listed Companies ("An Integrated Report" 2009).

Gap Identification

In the context of Pakistan, to fill the gap regarding One Report phenomenon, an exploratory research has been conducted to refine the idea and its feasibility. Then quantitative data collection instrument has been used to assess managerial understanding and adaptability to accept or prioritize the subject matter. In the whole process, annual reports of several companies, integrated reports of some companies have been reviewed to further explain the differences between the two formats.

Economy of Pakistan

Pakistan is a developing country and according to World Bank, its economy is the world's 25th largest economy based on its purchasing power. However, the country remained on the breadline because of internal political disturbances and trifling foreign investment, since independence. With the rise in development spending by Islamabad, the country's poverty levels reduced by 10% from the year 2001 to 2007. The economy grew between 2004-07 because of a shift in GDP from 5 to 8%. This was largely due to development in industrial and services sector irrespective of severe electricity shortfalls. However, the year 2007 witnessed a lot of political and economic instability which led to depreciation of Pakistani rupee. The growth of the economy was affected once again during the 2008 global economic recession. Inflation remains the top concern among the public, which has jumped from 7.7% in 2007 to 20.3% in 2008, but fell to 14.2% in 2009 and has further decreased to 11.17% in the first quarter of 2010 (Federal Bureau of Statistics, 2010).

Corporate Reporting Initiatives In Pakistan

In Pakistan, a number of multinationals are regularly producing their environmental reports in line with their global commitment and policy. These reports, however, typically contain only positive impacts and company actions and not the negative ones. Some local firms from the carpet industry, sporting goods industry and surgical industry are also partnering with government agencies, NGOs and UN agencies to promote their social and economic goals and report them periodically. In particular, these firms are improving labour standards, protecting biodiversity, and providing health facilities to numerous local communities in Pakistan.

World Wildlife Fund (WWF) took an initiative in association with ACCA Pakistan in May 2002 under the title of Pakistan Environmental Reporting Awards to promote environmental reporting in national and international companies operating in the country. As a principle, Pacific Employment Relations Association (PERA) does not provide any particular guidelines of its own. Rather, it promotes the Global Reporting Initiative (GRI) guidelines (Rafiq, 2009).

There is a progressive trend in environmental reporting as shown under the PERA scheme which received 8 reports in the first year, 18 in the second and 12 in the third year. These reports have a varying degree of thoroughness, objectivity, transparency and clarity. Their formats also vary and social and economic dimensions of corporate sustainability are not very distinct (Rafiq, 2009).

Many specialized organizations are now working to sell the idea of corporate social reporting (CSR) to corporations in Pakistan. CSR Pakistan, Global Compact Pakistan, Responsible Business Initiative (RBI) and the Pakistan Centre for Philanthropy (PCP) are some organizations which are promoting social and environmental responsibility reporting in the country.

In general, the multinationals and big national companies have been reporting so far. Most of the businesses that fall in SME category and the industrial sectors have never even learnt the corporate social responsibility reporting concept at all, and thus they are very far from Integrated Reporting Initiative.

The Cleaner Production Institute, which is the research and development organization in the non-governmental sector and works to enhance the competitive ability of industry, has partnered with more than 500 industrial units in the paper, textiles, leather and sugar sectors, through implementation of environmental and energy technologies, certifications and reporting etc (Rafiq, 2009).

Purpose and Scope of the Study

The explicit purpose of this research study is to present a brief literature review on One Report and to assess corporate manager's level of acceptability in adopting the integrated reporting initiative. The main purpose of this research is to offer a complete set of benefits and challenges that corporations will be facing in Pakistan.

As far as the Scope of this study is concerned, KPMG international survey of Corporate responsibility reporting 2008 noted that 79% of the world's biggest 250 companies now produce integrated social reports that is an increase of 52% since 2005 (Oates, 2009, p. 13).

research questions

This research study is intended to explore the basic perception and level of acceptability of practitioners regarding integration of financial and non-financial performance reports. So, 3 questions were devised. First question was measuring the judgment style of practitioners regarding any company.

Question 1: What are the most important factors a practitioner take into account when making a judgment about a company?

The second question explored usefulness of certain measures of assurance of transparency which are actually in practice in many other countries and by many multinational companies.

Question 2: What are the most useful measures of assurance of transparency that shall be included into the company's annual report?

The third question was aimed at exploring the benefits of integrating financial and non-financial information? And will they contribute to building shareholder value?

Question 3: What could be the benefits of integrating financial and non-financial information in an integrated report (one report)? Will they contribute in building shareholder value?

literature review

Companies have been publishing annual reports representing their financial strengths or upcoming projects. But the dilemma with such reports has been very visible that they were only showing financial aspects of the organization. On the other side, the business world demanded more than that. The whole business world has been talking about long-term strategies having long-lasting positive impact. But, before going towards a thorough discussion of integrated corporate reporting, we need to discuss corporate reporting in its traditional function.

Objectives of Corporate Reporting

The primary objective of corporate reporting is to inform shareholders about how successful the company has been in generating value and financial returns, and to enable them to assess its prospects for generating future value and returns (Willis, 2007). Corporate reporting also predicts the decision making trends of both existing and potential investors.

Another objective is to enable all stakeholders, whether or not shareholders-to assess the extent to which the company has discharged its responsibilities and to make decisions or action plans or take actions accordingly (Willis, 2007). Corporate reporting can also function to enable all connecting nodes of accountability between stakeholders and the company. However, in case of shareholders, there is a clear accountability vested in Boards of Directors and management for satisfactory stewardship of invested funds and legally enshrined expectations that the directors will act in the best interests of the company (Willis, 2007; Philips, 2003). The availability of financial information is essential to enable all investors to make informed decisions on a level playing field.

Conceptual Foundation of Integration of non-financial and financial information

While integrated reporting is embryonic, non-financial reporting is approaching pre-adolescence. More than 2000 companies around the globe are publishing more than 25000 different citizenship, environment, sustainability, social, and financial reports (Oates, 2009), while above 40 % use the framework introduced by GRI (White, 2005). The quality, rigorness, and completeness of corporate reporting has gone through dramatic enhancement relative to just 10 years ago. Who would have expected that an apparel brand like St. Michael or company like Nike would disclose a complete list of its 750+ contract factories in its 2004 corporate social responsibility report or that companies like Nestle, Mobilink, PTCL, Coca Cola, or commercial banks would be participating and then communicating their efforts of helping earthquake or 2010 flood victims of Pakistan. It is a fast-moving, dynamic movement that looks for more like a race to-the-top than a race-to-the-bottom. The former days of reporting for public relations or product and service promotion are quickly coming to a close. By all indications, non-financial reporting is on a trajectory to becoming standard business practice in the early 21st century.

Non-financial information disclosure through corporate reporting goes back to the 1970s, when companies started to include environmental information in the annual reports (Marlin & Marlin, 2003). However, these reports contained little detailed performance information. The trend toward broader reporting started in the 1990s as the concept of sustainable development, introduced by Brundtland commission, quickly gained huge recognition among both business and public sectors (Bruntland, 1987).

SustainAbility Institute introduced the concept of Triple Bottom Line (TBL) in 1994. The concept of TBL demands that a company's responsibility lies with stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business unit should be used as a vehicle for coordinating stakeholder interests, instead of just shareholder profit maximization (Philips, 2003). The triple bottom line is made up of "social, economic and environmental" while the "people, planet, profit" phrase was coined for Shell by SustainAbility. Meanwhile, Kaplan & Norton (1992) introduced the balanced scorecard, a set of measures that allow for a holistic, integrated view of business performance. It was developed largely for internal management and reporting purposes, although it is relevant for external reporting purposes as well (Eccles & Krzus, 2010, p. 80).

GRI and PWC began their work at about the same time in the late 1990s but each had different focus. The goal of the Global Reporting Initiative (GRI) was to develop a reporting framework for providing stakeholders with applicable information regarding a company's economic, environmental, and social performance. In contrast, the PwC Value Reporting Framework (now called CorporateReporting) was focused on identifying information in which analysts, investors, and chief financial officers were interested for making investment decisions that went beyond the required financial information but with little attention to ESG factors (Eccles & Krzus, 2010, p. 80). It is an approach for measuring and managing corporate performance and structuring communications about the performance. It consists of four categories of Information; Market Overview, Strategy, Value creating activities, and Financial Performance (Eccles & Keegan, 2001).

So far, many frameworks have been proposed on how to integrate non-financial information with financial reporting. Institute of chartered accountants in England and Wales (ICAEW) issued a report in 2003 containing summaries of 11 proposed corporate reporting models dating back more than 10 years. The ICAEW concluded, "None of these models, whatever are their merits, have so far succeeded in commanding general support. At present, they provide a collection of interesting and challenging ideas, many of which seem to have little prospect of widespread implementation" (ICAEW, 2003, p. 2).

A complete agenda for integrated reporting was proposed by Allen White in 2005. He presented several drivers and the prospective approaches to integrate non-financial reporting. He proposed six core elements of an integrated reporting approach: Leadership, Benchmarking, execution, engagement, monitoring, and assurance (White, 2005). Vancity (2005) reviewed 12 organizations producing integrated reports and discussed different dimensions through exploratory research. Several benefits, opportunities and challenges were proposed. However, the companies that decide to integrate their reports are going to adopt the best way to reflect their Holistic management approach (Vancity, 2005, p. 15).

A major and one of the most prominent corporate reporting model is one which is based on Corporation 20/20 principles of Governance. This includes integrating financial, and non-financial information in one report (Willis, 2007). It envisioned a new corporate reporting framework that serves multiple stakeholders by containing a statement of how wealth has been distributed to those who helped create it (Willis, 2007).

Multinational corporations (MNCs) realized this new transformation wave in corporate reporting and quickly started adopting it and thus 3,400 Corporate Responsibility reports got published during 2008 while 23,000 reports profiled on (Scott, 2009). Amount of Integrated reports being published has grown from only 7 to 186 during the timeline of 2005-2009, while uptake of GRI has grown from 8% in 2003 to 38 % in 2009 (CorporateRegister, 2010).


Bob Massie, Founding Chair of GRI Steering Committee, once said "We all know that a corporation… was an organization that pulled in resources, transformed them, and emitted products, knowledge, and waste, and that only some of inputs and outputs were captured by the form of measurement we refer to as accounting. As a result, our idea of what it is to create wealth-real, lasting wealth, genuine, enduring capital-is hopelessly primitive and unsophisticated" (as cited in Eccles, & Krzus, 2010).

Certain Forces have been driving this wave of transformation in corporate reporting. These drivers include a range of different competencies, action, and liabilities (Slater & Gilbert, 2004). One of the most important and influential force is growing internal understanding and support for sustainability. Employees, suppliers, partners, competitors, customers, clients, governments, Not-for-Profit organizations, NGOs, and many independent institutions are forcing companies to develop sustainable business policies.

The accountability failures at Enron, WorldCom, and Tyco in United States, and Parmalat and ABB in Europe have accelerated the need to include non-financial information like measurement of the outcomes of each organizational activity or decision, management analysis, strategic orientations and action plans into the annual reports (White, 2005).

For investors, current reporting does not facilitate them with information on the intangible assets that today account for well over half of the market's capitalization. Investors are more interested in key performance indicators (KPIs) both financial and non-financial related while non-financial KPIs are the area where most companies struggle but it is the most important to restore trust (Farris et al., 2010).

The new-style integrated corporate reporting would provide relevant, reliable and concrete information that various stakeholders could use in deciding whether they need to take issue with company regarding something of concern and if so, then what could be most appropriate plan of action (White, 2005).

Prospective Benefits of integrating Non-financial with Financial information

Integrating Financial and Non-financial Information Disclosure possesses the potential to significantly change how companies operate and investors think, shifting the focus of thinking about short-term goals to the development of long-term strategy and a very strong commitment of attaining sustainable Corporate and Societal Vision (Eccles & Krzus, 2010).

Value to Stakeholders

Integrated One or even Dual reports can communicate company's current performance, from positive and negative, and thus can set the stage for the better future because investors, financial analysts, employees, social activists, and most importantly customers have prime interests in it (Vancity, 2005; Eccles & Krzus, 2010). Through integrated reporting, relationship between financial and Non-financial information becomes more apparent which result in facilitating stakeholders with improved information regarding company's performance and how it has been achieved (White, 2005).

Disclosure of how companies operate can lead to creation of an internal discipline necessary for incorporating sustainable thinking into company's strategy and operations; to better company understanding that governance, strategy, and sustainability are inseparable (Eccles & Krzus, 2010); to acknowledgement that company is responsive to the risk and opportunities created by the need to ensure a sustainable society; and to enhanced corporate disclosure and transparency (Eccles & Krzus, 2010).

Value to the company

By enthusiastically practicing integrated reporting, companies can look forward to several major operational benefits. Utilizing internet as mood of presenting or online publishing the Integrated Report, companies can definitely cut some of the publishing and printing cost (Vancity, 2005). There will be greater clarity about relationships and commitments. As companies will be having a better understanding of financial information through and with the support of non-financial information and through modelling and analysis, and through improvisation in internal systems and measurement methodologies, it can also re-evaluate its categories of risk, opportunity and choices (Eccles & Krzus, 2010). And thus much better decisions can be made when concrete data regarding quantitative and qualitative performance metrics is available (Farris et al, 2010). As accountability increases because of enhanced performance measurement criteria, reputational risks decreases which in turn grabs the attention of not only investors but of customers as well (Oates, 2009).

Lastly, deeper engagement, and growing commitment ensures that company's strategy is attuned to customer and societal needs and which in return increases the likelihood that a company is sustainable over the long-run.

Prospective Challenges in adopting Integration of Financial and non-financial information

Many executives and companies consider integrating financial and non-financial information quite difficult, though they realize and admit that it can bring significant change with implications for several business areas like communication, investor relations, finance, sustainability, and stakeholders (Vancity, 2005, p. 8). They are of this opinion because, as they consider, quantifying each organizational activity into a measurable outcome is very difficult and time consuming. However, the problem is fear of accountability and increased responsibility, and commitment. It needs senior management support to succeed in this arena.

Time pressures and data gathering can also make this Integration a bit challenging. Pulling together all the data and converting it into financial and non-financial information through thorough analysis and then putting it into annual reports as par deadlines is a significant challenge. Hewlett Packard and Novo Nordisk overcame this obstacle in stages, by first producing a separate sustainability report that was released at the same time as the annual report. Once the data collection and drafting processes were on the same timetable, combining the reports was not such a stretch (Vancity, 2005; Eccles & Krzus, 2010). PepsiCo provided an overview of data in the printed report and put supporting documentation on an interactive website. The website information is updated throughout the year. This allows PepsiCo to spread its measurement and reporting effort rather than concentrating all the resources on one deadline (Vancity, 2005).

As a lot of financial information is supported by narrative analysis, report size was noted as a challenge by both reporters and other exporters (Scott, 2009). There was concern among the other experts that readership of reports could decline if reports become too large. Users who are interested in just one area, such as traditional financial analysts and some labour and environmental groups may find it harder to locate the information they need (Vancity, 2005; Scott, 2009). Other experts were concerned about the potential loss of information if reporting companies get serious about editing their reports for size (Vancity, 2005). One solution which has been adopted by a lot of companies around the Globe is to post separate section of annual reports so that readers can download the relevant one. Another solution could be the better use of on-line reporting, which will mean interactive formats instead of large PDF downloads.

Integration can also require new set of skills. As no standard guidelines are available regarding the format of One Report. Integrated reporters tussle with how to make their reporting persuasive and relevant to readers, and make available the data they expect, without overwhelming them. Novo Nordisk has selected a magazine format that is arranged thematically instead of the traditional triple bottom lines. That is one of the big reason that Novo Nordisk has again been awarded as Best Integrated Report of 2010 (CorporateRegister, 2010). Data on the website and in summary tables can still be accessed by category for those who are interested in specific issues.

Non-financial information disclosure requires narrative analysis presented after measuring each organizational performance metric like Marketing Productivity metrics, Brand Audit, Customer Equity, Employee satisfaction, organizational efficiency, and other metrics related to Financial performance (Farris et al, 2010). While most of the finance and marketing managers have different perceptions regarding marketing performance measurement. Finance managers consider it less important and more difficult to measure marketing productivity, brand equity, and customer equity as compared to marketing managers who consider it of significant importance (Azam & Qamar, 2010). So, managers need to be trained regarding measurement concepts and procedure so that a very concrete analysis can be presented.

Standardization & Formats

There are a total of 142 country standards or laws with some form of sustainability-related and narrative reporting requirements are available, while 65 % of these standards can be classified as mandatory and 35 % can be classified as Voluntary (KPMG, GRI, UNEP, & UCGA, 2010). A total of 16 standards with some form of reporting requirement at the global and regional level; and 14 assurance standards have been introduced so far. But GRI is the most prominent and mostly adopted one (Eccles & Krzus, 2010).

The Cleaner Production Institute Pakistan (CPI), is currently carrying out its Program for Industrial Sustainable Development (PISD) in association with Royal Netherlands Embassy and intends to assist at least 43 industrial units to generate their annual CSR reports during the project life (2007-2010).

The CPI teams chose two important models and guidelines for this purpose, that is, the Global Reporting Initiative and UNIDO's Responsible Entrepreneurs Achievement Program (REAP). The earlier is an acceptable international model while the later provides customized guidelines for SMEs especially of the developing countries. The GRI's G3 guidelines are more comprehensive and contain well-stated indicators and parameters. CPI and PISD teams use customized versions of G3 indicators (Rafiq, 2009). So far, 10 reports have been submitted for approval to respective industries and they are according to G3 guidelines.

GRI's G3 Guidelines

The Global Reporting Initiative (GRI) produces one of the world's most established standards for sustainability reporting. As of January 2009, more than 1,500 organizations from 60 countries use the Guidelines to produce their sustainability reports ( GRI Guidelines apply to corporate businesses, public agencies, smaller enterprises, NGOs, industry groups and others.

The Global Reporting Initiative (GRI) is working towards a global application of its sustainability reporting framework, which is already widely used and demonstrates continuous improvement through its network-based structure. GRI compares the reporting of financials as a familiar template for its unified disclosure mechanism, the Sustainability Reporting Framework, encircling social, economic and environmental performance. Reliability and transparency in the sustainability information exchange are hallmarks of GRI's framework. The baseline for sustainability reporting implementing GRI techniques are its Guidelines, and possess applicability no matter where, how large or what industry or organization currently engages in.  GRI Guidelines contain what are termed as "indicators" which serves as a way forward for an organization to gradually enact over time.  Within specific indicators are in turn "protocols", which provide greater focus on how to meet the standards within the GRI Guidelines (Global Reporting, 2009).

What Investors Want?

There are two approaches investors employ in evaluating stocks: fundamental analysis and technical analysis. Fundamental stock analysts usually focus on a the ability of any company to grow and make itself profitable in the future. They do so by considering how much profit the company has earned in the past, how much money it has borrowed, how much dividend it has paid out to investors, how capable its managers are, and other things that may affect the long-term profitability of the company. In considering the capability of its managers, a fundamental analyst might consider the qualifications of a new Chief Executive Officer (CEO). If the new CEO has been appointed from a company which he whipped into shape and made it more profitable, and he would be equally contributing to the present one. This could be an encouraging point of interest for the fundamental analyst (

On the other side, technical analysts focus on movement of stock prices and how many shares of a company's stock are bought and sold on a day-to-day basis. Pure technical analysts do not typically concern themselves with the company's historical earnings or how wonderful the management may be. They are more likely to chart up-and-down movements of a company's stock price for a period of time. By looking at the pattern of such movements, good technical analysts can sometimes predict to which direction stock prices will move (

The Report Leadership Group, comprising of the Chartered Institute of Management Accountants (CIMA), PricewaterhouseCoopers (PwC), and Radley Yeldar, has suggested certain ways about how companies can simplify and improve their external communications (Eccles & Krzus, 2010, p. 64-65). Table 1 summarizes the group's recommendations regarding improving the structure, navigation, and messaging of business reports, based on research into the needs of investors. Report Leadership (2006) recommended that nonfinancial information on strategy, the company's value creation activities, the business environment, and key performance indicators should be included.

Emerging Trends

The table 1 presents certain challenges that companies face in developing the annual integrated reports. However, companies are adopting certain ways to meet the exceeding expectations of stakeholders. Novo Nordisk has selected a 4-coloured magazine format which is arranged thematically, while data and tables can still be accessed by category on the website.

HP, Novo Nordisk, and Novozymes overcame the challenges of time pressures and data gathering in stages. They produced sustainability reports at the same time as the annual report and then combined them into an integrated one report. Navigation between the data was made easier by uploading the annual reports on websites in both PDF and HTML versions. Chapter-by-chapter modules are also provided for the individuals who require very specific information. Virgin media Inc won the Openness and Honesty award in 2009 through publishing its Responsibility report. This award was for the report which came clean, telling both the good and the bad news, and which convinced the audience that this is a balanced picture of the company (Corporateregister, 2010).

The Brazilian cosmetics, fragrances, and personal hygiene company Natura is a very good example of a company that sees value in a carefully crafted annual One Report. At the same time, it sees this report as simply one piece of its overall approach to integrated reporting, described in the section titled "Natura" (Eccles & Krzus, 2010, p. 15). Annual report of Natura for year 2009 is a slim 91-page four-color publication that makes effective use of photographs, diagrams, and graphics. The company clearly sees the report as an important way of presenting its purpose and view of the role of business in society as it says "Our Reason for Being is to create and sell products and services that promote well-being/being well" (Natura, 2009, p. 3). Citing Aristotle, Corbett & Connors (1975) outline three ways in which people are persuaded: "(1) by the appeal to their reason (logos); (2) by the appeal to their emotions (pathos); (3) by the appeal of our personality or character (ethos)" (as cited in Eccles, G., & Krzus, 2010). Natura uses all three of these throughout its annual report. Persuasion of the audience can also be achieved through design of the annual report.

Annual report of Natura (2009) demonstrates the benefits of a physical, thoughtfully designed document that obviously has the reader in mind. Textual and numerical information are presented with a minimalist appeal, presenting Natura as a company whose products are made with simple, natural ingredients. The company includes both photographic imagery and abstractive, illustrative designs, making this an excellent example of how One Report can incorporate aesthetic and practical considerations (Eccles & Krzus, 2010, p. 17).

As annual report of Natura represents, One Report is a document as well as utilising technology to facilitate dialogue and engagement with all stakeholders. The companies can both involve numbers, words, and images. One Report makes use of many different media formats to present a holistic view of the company to all of its stakeholders.



The research design is based on relativism approach because of the implied suppositions made in the development of research questions. The study focuses on interrelationships instead of focusing on causality or understanding of the phenomenon. The content of questionnaire is based on the conceptual framework proposed in the literature review. The questionnaire is thus divided into 5 categories, general information, judgment about the company, measures of assurance of transparency, and prospective benefits of One Report while an open-ended opinion-oriented question was asked regarding any recommendations, or addition to the subject matter.

Five-point Likert scale has been used for all three questions. For assessing Judgment about a company, a scale ranging from Most important to Not-at-all Important was devised. For measuring usefulness of measures of assurance of transparency currently in practice, a five-point Likert scale, ranging from Very useful to Not applicable was provided. In the end, benefits of One integrated report were assessed using a five-point Likert scale ranging from strongly agree to strongly disagree.

Two questionnaires have been developed, 1 for self-administered way and 2nd for collecting data through personalized e-mails. However, to reduce the chances that managers might not be having sound understanding of the terms being used in questionnaire, a glossary of terms was provided at the end of questionnaires being sent through e-mails. However, this glossary was then attached to the self-administered questionnaire as well. This step was taken after consulting 12 Marketing and finance managers from Warid telecom, Wateen telecom, Bank Alfalah, Dewan Motors and Faisal Bank, MEI-PAK and 6th sense Consultation. Apart from the above discussed managers, some professors, lecturers, analysts who are subject matter experts were also consulted.


The sample of size 150 was decided while the unit of was marketing and finance executives, economic or financial analysts/consultants, and MBA/MS/Mphil students. As it was a managerial sample, observations around 150 were thought to be reliable for generalization of results. The data was collected through judgmental sampling technique in which Snowball sampling was used to collect data from different managers through referrals from the previously interviewed managers, while stratified sampling technique was employed to group executives, analysts, consultants and practitioners according to their nature of industry.

Data Analysis

The statistical techniques to be applied depend on the structure of collected data. Before description of the findings of the survey, the profiles of the respondents and comparative tests have been applied, in order to describe the sample and to determine its degree of external validity. The external validity is "the extent to which research findings can be generalized beyond the immediate research sample or setting in which the research took place" (Gill and Johnson, 2002). According to Hussey and Hussey (2003), low response rates and missing values may bias the data and thus may not be the representative of the population. To do so, a screening process was carried out to remove the survey questionnaires with missing values and thus 101 observations were obtained.

Before running any test or making any analysis of the data set, the reliability of the instrument was tested. Cronbach alpha was used for reliability measures. Reliability measure was taken both at category level and for the overall instrument. The measures for three different categories ranged from 0.73-0.78 and overall reliability measure of the whole instrument was 0.86 which is well above average and ensures the reliability of the instrument used.

The respondents were categorized between managers and managements students of the final semesters. The students of the final semesters were selected because they were about to get into the markets as fresh breed of management and purpose for selecting them was to see that whether any difference of perception lies between managers and to be future mangers about the concept of One Report. Of the 125 questionnaires, 104 were collected back at a response rate of 83%. Three questionnaires were rejected due to missing values. So the further analysis was done with 101 respondents' feedback. Among the data available for further analysis, 77% were managers and 23 % were management students.

Characteristics of the Respondents




Management Students


As stated earlier, the purpose of taking students as respondents was to see that whether any difference lies in the perception of managers and students about One Report. This was done by comparing means through independent samples t-test at 95% confidence interval.

t-test suggest that there is no significant difference between perception of managers and students regarding process of making judgment about the company, measures of assurance of transparency, and perceived benefits of One Report except Communication/ Info provided under the process of making judgment about the company head where managers think it is important for making judgment about the company, whereas students are more inclined that this is not relevant. Except this, no significant differences exist between the perception of managers and students.

Simple descriptive were used to test the perception of the respondents and means were calculated for this purpose. The first question was about how the respondents make their judgment about any company. The most important factor that scored higher means with respect to their importance was found to be the "Financial Performance". Its mean sore was 4.65 followed closely by "Image and Reputation" which scored 4.59, Quality of Product/Service which scored 4.58, Customer Service which scored 4.50, Treatment of Staff which scored 4.47. Respondents consider these factors highly important for making their judgment about any company. Honesty/Integrity (4.37), Corporate Strategy (4.13), and Valuation of financial statement (4.02) were also considered important followed very closely by Market share and Communication/Info provided which share the same mean score of 3.98. Rest of the factors scored either to be important or more inclined towards important for their usage for making judgment about a company.

The second question was about measures of assurance of transparency. Here, again, financial position gained higher mean score of 4.74 followed by risk profile (4.38), customer service initiatives (4.25), and Management team's competencies (4.21) were considered very useful as measures of assurance of transparency. Training and development measures of employees, economic value addition, marketing productivity measures, brand audit, and competitors' profile were also considered useful as measures of assurance of transparency by the respondents with little mean differences. These factors were closely followed by compensation review, corporate social responsibility, segmentation analysis, treatment of staff, and environmental responsibility as considering them useful too.

The third question was about the perceived benefits of the One Report. Analysis suggest that respondents perceive that One Report will have fruitful results in the form of increased stakeholder's trust and integrity which has the highest mean score of 4.35 followed closely by enhanced reputation and strong brand (4.33), better stakeholders relations and strong alliance with partners, greater customer loyalty (4.31). One Report will be also beneficial as it has been perceived of causing new business opportunities and higher sales volumes. Other benefits include low operational & strategic risk, reduced regulatory interventions, and improved access to capital. This will also help saving cost as higher cost will be incurred in publishing financial and non financial reports separately.

Discussion and Managerial Implications

The very first objective of this research study was to present and propose the idea of 'One Report' which has been accomplished by defining, explaining the subject matter from different perspectives and with the support of relevant theories of each perspective.

The results originating from this research study generate suggestions that can be utilized by managers and practitioners to develop communication strategies in a more effective manner. Furthermore, there are not significant differences between the perception of managers and academic practitioners regarding the concept of integrated reporting. However, the understanding and awareness of the underlying assumptions of one report phenomenon is lacking. The implications are as follows:

Firstly, the skills required to effectively execute these efforts must be cultivated in the business administration curriculum. Incorporating the topic of sustainability into the curriculum and then classroom needs to be cross-disciplinary, replicating the actual practices being carried out by multinational companies regarding integrated reporting. This could take shape in a variety of ways. A financial accounting professor can teach reporting of ESG metrics in combination with traditional financial analysis. In finance, students can study opportunities and threats arising from ESG issues and measure their prospective impact on the valuation of a company. Courses on operations management can include sustainability issues to the discussions of efficient supply chain management. Political economy subject could be taught by including modules on collective responsibility of individuals as global citizens and ways in which businesses should partner with governments to advance sustainability.

Secondly, though there has been an extensive discussion regarding what one report concept is all about? but scholars, so far, have not been able to propose right format and the implementation model like what should be included in one report and how it should be executed both for internal and external reporting. To make one report a reality in the context of Pakistan, companies need to take certain steps for better adoption.

Companies, at first, need to get approval of Board of Directors. Board of Directors not only need to approve the one report proposal but the project demands the commitment for better execution. Secondly, company need to embed sustainability into the vision. To do so, CEO must be committed and should align sustainability with every action plan of the organization. The CEO needs to envision that market in Pakistan is not efficient and companies are not optimally managed and hence, there is always room available for change and transition. Regulatory interventions should also be addressed by having a broader stakeholder perspective in mind. In fact, there have been many public sector initiatives regarding integrated reporting. Table 5 presents an overview of these initiatives. Thirdly, use of updated technology in the field of communication is of prime value, and companies can leverage this technology to foster the process of internal and external reporting. In the end, support from the investment community and civil society is very important. And this can only be achieved by communicating the prospective benefits of adopting one report. Companies need to understand and communicate to audience that traditional reporting has been just about "what are the results of our actions", while one report is about "what are the actions, how we are executing them, and how much sustainable quantitative results we have earned?"

Limitations and future research recommendations

The findings of this research are limited in several aspects and it must be understood that certain limitations may influence any observations and conclusions made. Firstly, the area of integrated reporting is an emerging field and there is limited prior research available on the subject matter particularly when such a research area is applied to the efficacy of results.

Secondly, there are limitations in the methodology of the study. Since judgmental sampling techniques are applied throughout this research project, the ability of the data to generalize to the population was reduced. Sample size needs to be expanded and managers, consultants, analysts should be surveyed from all sectors of economy.

Based on the findings of this research, it would be interesting to explore the view of marketing, finance, and Human Resource management within the same company to observe whether the difference of perception, acceptability or adoptability exist or not. Furthermore, the research can be enriched by comparing companies that operate in Business-to-business and business-to-consumer areas. It can also be extended to comparing companies operating in different sectors and with different budgets.

However, two limitations which are very critical but were beyond the scope of this research study are cost-benefit analysis of adopting one report and proposing a clear roadmap for the adoption of one report. Cost-benefit analysis includes comparing the cost of collecting data regarding contents of one report and then actually producing it as compared to the separate reports. While clear roadmap means suggesting or recommending a business model regarding the planning, organizing, executing and controlling every single facet related to One Report.