Integrated reporting in Sri Lanka: An exploratory study

This thesis explored the journey of integrated reporting (IR) of the publicly listed companies (PLCs) in Sri Lanka with four main purposes: • To explore the extent and nature of IR disclosures published by the Sri Lankan PLCs using a disclosure index based on the international IR framework (IIRF). • To explore the motives behind the voluntary adoption of IR using institutional theory. • To investigate how do IR and integrated thinking foster each other in Sri Lankan PLCs. • To discover the challenges encountered in the voluntary adoption of IR in Sri Lanka. A qualitative methodological approach was adopted to address the research purposes. A triangulated data collection method was used during two phases. During the first phase, data were gathered through a content analysis of the entirety of corporate reports of the 34 PLCs listed in the Colombo Stock Exchange across the seven-year period from 2010 to 2016, examining 238 annual/integrated reports in total. This study developed a systematic and comprehensive disclosure index. During the second phase, this study carried out 62 semi-structured interviews based on a participant triangulation, including IR practitioners and other various IR actors who were involved in the IR process in Sri Lanka. Qualitative interview data were organised using NVivo software and analysed using thematic content analysis. Findings revealed a growing trend of IR adoption by listed companies in Sri Lanka moving beyond an early adoption stage to a developmental stage of IR. Results showed evidence for companies which embarked on IR and prepared integrated reports even before the establishment of IIRF. However, the number of followers of the IR framework were less compared to the number of IR adopters. This study found a collective influence through the three external isomorphic forces (coercive, mimetic and normative) and internal isopraxism forces in determining the motives behind the voluntary adoption of IR in Sri Lanka. The study also found hybrid definitions and approaches in practice when interpreting and perceiving the relationship between IR and integrated thinking by the interviewees. In terms of quality scores for guiding principles, consistency and comparability was ranked highest followed by strategic focus and future orientation, and stakeholder relationship. Based on disclosure scores for content elements, the most information was disclosed for governance. Nevertheless, interviewees revealed challenges, issues and criticisms in relation to the implementation of IR, preparation of integrated reports, IR framework and its components, value relevancy of IR, and achieving credibility and conciseness in integrated reports. This thesis extends its significant contributions from scholarly, theoretical, methodological and practical perspectives as follows: • By assessing and synthesising past IR research through a comprehensive and broader review, this offers scholarly contributions to the advancement of knowledge on IR research. • The distinct nature of the present research stands as the first study in a developing country context to provide a structured and comprehensive IR disclosure index as a benchmark for analysing and evaluating the level of compliance with the IIRF and for assessing the extent and nature of the IR disclosures extending scholarly, methodological and practical contributions. • This adds methodological contributions by addressing a longitudinal analysis of the corporate reporting practices with special reference to IR disclosures over a seven-year period of analysis from 2010 to 2016, covering both pre- and post-regulation periods of the IR framework, where no previous studies have been addressed such. The participant triangulation also extends the methodological contributions. • The use of the institutional theoretical lens with institutional isomorphisms and isopraxism provides theoretical contributions. This study contributes to the existing knowledge by proposing a theoretical framework to conceptualise integrated thinking in practice through a stakeholder approach to multi-capitals management. The learning through the findings of this study extends practical contributions as implications for current and potential IR practitioners by providing useful insights. The empirical findings drawn from a voluntary setting for IR in an emerging country inform ongoing discussions of policymakers, local and international regulatory authorities, standard setters on the IR disclosure practices over time and bring attention to specific areas to refine, upgrade and improve disclosure guidelines and policies in IR and also provides practical implications to accounting firms, professional and educational institutions as assurance providers, award organizers, evaluators, advocates and educators in IR. Testing the proposed framework empirically and comparative analyses involving developed and developing countries and mandatory and voluntary settings in IR and technology enablers in IR would be avenues for future research