Trends in Integrated Reporting: A State Owned Company Analysis

Abstract

The need for an oversight mechanism to improve governance and as such accountability is required for state-owned companies (Institute of Directors South Africa and PwC 2011). Integrated reporting, if appropriately implemented, can answer this call due to its ability to provide a holistic view of the factors that create value for an entity in the short, medium and long term. The purpose of this study was to investigate the trends in integrated reporting by state-owned companies for the 2013, 2014 and 2015 financial periods with reference to section 2 of The Public Finance Management Act 1999. This study examined the nature and extent of disclosures made by state-owned companies with reference to the recommendations and requirements of King III (2009) and The International Integrated Reporting Framework (IR Framework) (2013) in respect of integrated reporting; by means of using a scorecard approach to identify the level of disclosure made by each state-owned company. The key findings of this study suggest that the level of reporting disclosure by state-owned companies increased over the period evaluated. A positive trend was identified in the level of reporting disclosures over the measurement period. Reporting disclosures generally increased from providing "little information" in 2013 to providing "some information" in 2015. It was found that there were no instances of non-compliance with overall disclosures in respect of King III and the IR Framework by any of the state-owned companies analysed over the three-year period. Furthermore, not a single company provided disclosure overall at an excellent level in any of the three years analysed. This finding suggests that although improving, the level of integrated reporting disclosure by state-owned companies is still only satisfactory and as such there is still much room for improvement