Leeds Business School | Blog

Laying the foundations for integrated reporting in small and medium sized enterprises

Researchers at Leeds Business School have been working with partners across Europe to lay the foundations for the development of practices to support Integrated Reporting (<IR>) in small and medium sized enterprises (SMEs). In this blog post Professor David Devins and Dr Brian Jones reflect on progress made to date in the Erasmus+ funded INTEREST project which seeks to develop training materials to support the creation and reporting of value by SMEs.

Laying the foundations for integrated reporting in small and medium sized enterprises

Source: https://integratedreporting.org/what-the-tool-for-better-reporting/get-to-grips-with-the-six-capitals/

Since the formation of the International Integrated Reporting Council in 2010, the concept of <IR> has increased in relevance and importance driven by a growing demand from a variety of stakeholders for a broader, more holistic range of information about the businesses they interact with. The <IR> framework provides a foundation for a principles-based mapping of the value created by a business. In clearly framing value creation in this way, the organisation and its stakeholders - customers, suppliers, employees, investors and others - have a better understanding of the drivers and how and where value is created. Most of the early adopters of <IR> are multinational and large organisations who suggest that they have realised considerable performance improvements and social and economic benefits from the process of integrated thinking and reporting. The INTEREST project aims to harness the potential of <IR> to encourage organisational change and achieve improved performance and more sustainable outcomes for SMEs.

Our work to date in the INTEREST project has provided a foundation for the development of a practical handbook and guide to encourage and support the use of <IR> by SMEs. Each partner has conducted a national review, which draws on a wide body of literature including academic journal articles as well as policy and practice documents. Examples of how larger businesses make use of IR are used to inform understanding of potential IR application in the SME context and several examples of <IR> help to illustrate the application of the framework. The knowledge and expertise of the respective national teams and the successful working of the project partnership has resulted in the national reports capturing the most relevant and appropriate body of work from theory, policy and practice.

An online INTEREST workshop promoted knowledge exchange amongst project partners in the early stages of the project. The workshop provided an opportunity for all partners to contribute, share knowledge about <IR> and influence the shape of the INTEREST project. Members of the Leeds Beckett research team provided expert input and facilitated discussions about <IR>. More than twenty representatives of the partners attended the workshop with input from both professional (EFAA) and business (MGYOSZ) networks helping to shape discussions.

Further preparatory work has included the production of individual reports on each of the six capitals underpinning the <IIRC> framework. The reports provide clear working definitions of each of the capitals, identify key stakeholders, discuss key issues associated with materiality, boundaries and interdependencies, identify a wide range of measurement indicators and provide case study examples. Each report considers these dimensions of <IR> in the SME context.

A comparative report draws together the preliminary analysis undertaken in the national and capital reports, incorporates some of the learning from the collaborative workshop and places it in the small and medium sized enterprise context. The comparative report highlights points of similarity and difference between the findings detailed in the national and capital reports. It outlines the SME landscape in each partner country, summarises key regulatory frameworks, identifies factors enabling or constraining <IR> development, highlights empirical evidence of <IR> and discusses the implications of the analysis for the INTEREST project.  This helps to lay the foundation for the next stages of the project which aims to develop a practical handbook and guide to support the Integrated Thinking and Reporting necessary to improve SME sustainability and to develop some e-learning materials to support knowledge transfer.

Further information is available from the project website:

https://www.interest-project.eu/index.php/

About the Author

Dr Brian Jones

Brian joined Leeds Beckett University in 2004 as Senior Lecturer in Marketing. Since joining Leeds Beckett University Brian has been engaged in teaching and lecturing, academic and applied research, funded projects (e.g. Erasmus plus) and consultancy (e.g. ERDF).

View Profile

Archive

Syndication