Governance Disclosures According to IIRC's Integrated Reporting Framework -Are Annual Reports of Swedish Listed Companies in Line with the Framework?
Integrated reportingCorporate governanceVoluntary disclosuresStakeholder theoryLegitimacy theoryInformation asymmetryCapital market transactions hypothesisAgency theorySelf-constructed scoring systemCompany size.
Background and problem - Integrated reporting is a hot topic today and is predicted to be the future of companies? external reporting. In December 2013 a new framework on integrated reporting was released and one part of the framework concerns governance and how it supports the organization?s value creation. A recent study on integrated reporting in Sweden showed the area of governance to be poorly reported. However, no previous study in Sweden has examined the current state of governance disclosures compared to the framework in depth. This is important in order to find good examples of reporting to further enhance the development of integrated reporting.Purpose - This thesis aims to assess the extent to which Swedish listed companies comply with the guidelines in the framework?s content element governance using a self-constructed scoring system. Furthermore, the aim is to analyze the possible relationship between the results and the size of the company.Methodology - The purpose was fulfilled through an analysis of 21 annual reports of Swedish listed companies, seven from each segment on the OMX Nordic Stockholm, i.e. large, mid, and small cap. The annual reports were assessed using a self-constructed scoring system primarily based on the framework?s content element governance.Analysis and conclusions - The study found that the majority of the companies at least mention most of the aspects included in the framework. However, the average annual report needs large improvements before it can be claimed to be in line with the framework regarding the area of governance. Furthermore, the study found a relationship between the result of the study and the size of the company, meaning larger firms were more in line with the framework?s content element governance.