Fostering Stakeholder Engagement: The Role of Materiality Disclosure in Integrated Reporting

This paper studies the determinants of materiality disclosure among International Integrated\ud Reporting Council (IIRC) Pilot Program companies implementing the IIRC Framework. In\ud other words, it studies which variables influence the way in which such companies provides\ud information about their materiality determination process. In order to test our hypotheses\ud we performed a number of statistical analyses on a unique hand-collected dataset including\ud IIRC and non-IIRC Pilot Program companies for the 2012 and 2013 fiscal years. Our results\ud indicate that industry and some firm-level characteristics (board size and diversity) do play\ud a significant role in the determination of materiality disclosure, whereas the legal environment\ud in which companies operate does not. Also, we found that IIRC Pilot Program companies\ud disclosed more information about materiality than their competitors that did not join\ud the program. This paper provides interesting insights for policy makers (in particular, the\ud IIRC) and extends previous academic literature on integrated reporting. Copyright © 2016\ud John Wiley & Sons, Ltd and ERP Environmen