Integrated thinking and corporate reporting quality: the moderating effect stakeholder engagement and stakeholder orientation
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2020-07-08
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en
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Abstract
Organizations are increasingly being held more responsible and accountable for the negative impact of their actions on the degradation of the environment. The embeddedness of integrated thinking (IT), the consideration of both financial and non-financial aspects of doing business, in a company’s strategy and daily practices is expected to positively affect corporate reporting quality (CRQ). For this reason, this study explores the relationship between IT and CRQ and the moderating effect of stakeholder engagement (SE) and stakeholder orientation (SO). Using a sample of European firms for the period 2008-2017, the results show that the more IT is embedded in a company, the higher CRQ. When analyzing financial reporting quality (FRQ) and sustainability reporting quality (SRQ) separately, the results only show a significant and positive relation between IT and SRQ. In addition, the results find support for a positive moderating effect of SE on the relation between IT and FRQ and support for a positive moderating effect of SO on the relation between IT and SRQ. The findings of this study are useful for stakeholders, since integrated thinking can signal credibility and fair representation, which enhances confidence. Furthermore, corporate reporting quality is positively related to future financial results and overall value.
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Faculteit der Managementwetenschappen