A normative view of value creation in the context of stakeholder understanding

Abstract

This paper contributes to the literature on integrated reporting and current perspectives of value creation, through the implementation of framing theory. The paper develops a normative understanding of value creation. It addresses the need for additional research on the use of an integrated report, from the perspective of integrated report preparers, in communicating the affairs of an entity. In doing so, the research explores the perceived informational needs of stakeholders from the perspective of preparers, using framing tasks. The research relies on institutional logics, as a theoretical framework and interviews 23 preparers of large organisations listed on the Johannesburg Stock Exchange (JSE). With he use of framing tasks, the purpose and objectives of the integrated report is investigated. The results reveal the following types of preparers: the compliance-focused, the stakeholder-focused and the business-focused preparer. Each of these preparers use the integrated report for a different purpose. This research approaches the problem of inconsistent and misdirected integrated reports. An investigation into framing tasks, yielded insight into the process of disclosing, measuring, and understanding value creation. This research explores how preparers respond to the challenge of preparing an integrated report, how they measure and present their value creation, as well as how they engage with their stakeholders. This includes obtaining an understanding of the motivations and incentives which drive the preparation of an integrated report. The results of this research shows how preparers have shifted from lengthy compliance-based reports, to integrated disclosures which allow for business models that achieve sustainability and produce a comprehensive account of the value creation process. This shift showcases the social mechanisms which support the preparation of integrated reports as the reporting process develops into a more integrated and instinctive form