This report outlines the reactions of the South African institutional investment community to the production of integrated reports by South African listed companies, as well as their suggestions for the future development of integrated reporting.
The aim of this report is to discuss the reactions of the South African institutional investment community to the production of integrated reports by South African listed companies. Interviews with South African institutional investors have revealed their views on the decision-usefulness of integrated reports as well as their suggestions for the future development of integrated reporting.
The evolution of responsible investment at a global level has, in part, driven the development of sustainability reporting and is likely to have led to the evolution of integrated reporting. Responsible investment is investment by institutional shareholders that takes ESG issues into account in the investment decision-making process. The power of the institutional investment community to influence and impel changes in corporate reporting and corporate accountability is generally accepted and has been the focus of many studies arising from the both the academic and practitioner communities. Further, the evolution of governance, especially within the South African context, has engendered a stakeholder-inclusive approach based on the need for corporations to focus on a broad range of stakeholder interests as well as those of the institutional investment community.
The successive King Reports have highlighted a stakeholder accountability approach to governance and have led international corporate governance developments. The third King Report led to the introduction of a stock exchange listing requirement for all companies listed primarily on the Johannesburg Stock Exchange (JSE) to prepare integrated reports. As a result, since 2010, integrated reports have been developed and published by all companies on the JSE.