Setting up risk disclosure: case-study insights from an integrated reporting pioneer

Integrated reporting (IR) urges companies to disclose risk management practices and connect key corporate risks to other company’s core elements (e.g., business model, strategy, governance, performance). Prior research has mostly focused on IR disclosures, yet it missed to highlight how different organizational actors and departments interact to gather, select, and combine the information to disclose. Insights from in-depth interviews with preparers of an IR pioneer reveal that existing risk management frameworks and reporting practices offer a solid starting point for the preparation of risk-related IR disclosures. However, preparing disclosures on specific risks in connection to the business model implementation, performance achievements and corporate governance mechanisms demands a strong interaction among several departments. Such interactions, in their turn, contribute to stimulate thoughts on managerial and risk management practices. With its results, the present work contributes to research on risk disclosure pointing out that IR enhances disclosure on key risks and risk management practices even in companies that adopt an enterprise risk management model, as well as disclosure on the impacts of these risks on business model, performance and corporate governance. Further, this study enriches prior literature on IR preparation process showing that, in an IR context, risk disclosures urge different departments to share a view on how key risks are related to, and may affect, other company’s core elements.