Incursions into the contributive company

Sabrina Roszak
Associate Dean of the Digitalisation Academy
SKEMA Business School

South Africa: a testing ground for mandatory non-financial reporting since 2011

In South Africa, it has been mandatory to produce an Integrated Report (IR) since 2011. Introduced in 2013 by the International Integrated Reporting Committee (IIRC), IR is based on “Integrated Thinking”, which aims to rethink a company’s business model by taking into account all the financial and non-financial resources contributing to it, and which it will affect in turn. Several studies point to an improvement in the corporate communication of South African companies since this became a legal requirement (Baboukardos and Rimmel, 2016; Barth et al., 2017; Sukhari and de Villiers, 2019; Zhou et al., 2015). However, few of them highlight its positive effects on internal practices (Moolman et al., 2019; Steyn, 2014). Overall, academic literature agrees that push models (forcing organisations to integrate CSR practices) can bring about some changes, but these take a long time to roll out and have no in-depth impact on the organisation.

For example, in an interview in June 2023, the CSR director of a South African listed mining company told us that Integrated Reporting had helped to “shape and influence” the organisation’s strategic thinking, particularly regarding the use of natural resources, human resources management and the fight against climate change. But he felt there was still a long way to go before Integrated Thinking became truly “rooted” in the organisation. He explained that when it came to making investment decisions, operational and financial issues always played a dominant role, while social or environmental issues were rarely addressed unless legal issues were involved. “Within my organisation, Integrated Thinking is still very much evolving.”

Rather than controlling, fostering Integrated Thinking in management teams

SKEMA’s book on Integrated Thinking produced in collaboration with CSR professionals and experts has highlighted how important it is for those “in charge of governance” (i.e. the board of directors and general management) to take an active part in disseminating Integrated Thinking throughout the organisation. To quote business strategy consultant Philippe Peuch-Lestrade, an expert in these matters, “the feet only move on instructions from the brain.” To cultivate Integrated Thinking at corporate level, those responsible for governance need to recognise that the company can be a source of co-construction. Different tools can be used, like training, pay systems and so on. For example, in 2013, Amsterdam-Schiphol airport began educating and training its executive committee and board of directors in Integrated Thinking and Integrated Reporting. At Generali, Group Reporting Director Massimo Romano says that key performance indicators for sustainable development are now linked to the senior management pay system.