Integrated Reporting in the Cloud: Two Disruptive Ideas Combined

by Robert G. Eccles and Kyle Armbrester
published in IESE Insight, First Quarter 2011
Ref ART-1890-E
 

Figures in the cloudIf the 'integrated reporting' of financial and nonfinancial performance in a single document takes off companies will face a number of challenges that can be efficiently dealt with via cloud computing.

Financial reporting for all listed companies is a long established practice, which more recently has been complemented by corporate social responsibility or sustainability reporting. However, the reporting of nonfinancial information related to environmental, social and governance performance remains largely voluntary.

Although still an embryonic management practice, the authors believe that 'integrated reporting' of a company's financial and nonfinancial performance into a single document is about to take off, as market and regulatory forces push more companies to adopt this practice. In doing so, companies will face a number of challenges, which the authors say can be efficiently dealt with via cloud computing. The disruptive idea of integrated reporting combined with the disruptive innovation of cloud computing will enable companies to make much more informed decisions about how they are using financial, natural and human resources to meet both financial and nonfinancial performance objectives. The result will be more sustainable company strategies that will contribute to a more sustainable society.

Tools and frameworks

  • “Three Benefits of Integrated Reporting” lists the internal benefits, external benefits and managing regulatory risk that comes when companies practice integrated reporting.
  • “Novo Nordisk vs. Competitors” and “Long-Term Financial Targets” both show how integrated reporting doesn’t necessarily hurt a company’s stock price.
  • “Novo Nordisk: A Pioneer in Integrated Reporting” offers practical tips for leveraging the Web to your advantage.

Examples cited

United Technologies, American Electric Power, Southwest Airlines, AXA, BASF, Novartis, Van Gansewinkel Group, King Report on Governance for South Africa, Grenelle II in France, Novo Nordisk, Natura, Philips, Oracle, SAP, Cognizant, Infosys, Tata, Wipro

Research basis

Based on two decades of research and work to improve corporate reporting practices, with three books, many articles and case studies, and working with companies, analysts and investors, accounting firms, NGOs, technology and data vendors, and regulators and standard setters.

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About the authors

Robert G. Eccles is Professor of Management Practice at Harvard Business School, US.

Kyle Armbrester (Harvard Business School MBA Class of 2012) is a cofounder with Eccles of Glenelg Partners.

 

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