Integrated Reporting, Corporate Governance Practices, Social Sustainability Policies And Environmental Disclosure. The Case Of South Africa

The principles of “good governance” issued by King III – and then by King IV that was launched in November 2016 – can be also evaluated in the view of an innovative model of corporate reporting, i.e. Integrated Reporting. Recently the International Integrated Reporting Council (IIRC, November 2014) pointed out a strong link between the process of integrated thinking/reporting and corporate governance, as it is confirmed by the conference organized by the IIRC in partnership with the International Corporate Governance Network (ICGN) (London, December 2016. In light of these premises, the present empirical research is focused on a sample of large-size companies listed on the Johannesburg Stock Exchange (JSE), in order to evaluate if the adoption of King III can stimulate both some corporate governance practices and some firm social sustainability policies, with the aim to positively affect on the environmental disclosure, as a consequence of the mandatory preparation of Integrated Reporting (IR). We analyzed a period from 2010 (the first time adoption of Integrated Reporting in South Africa) to 2015 (the early year of the release process of the King III). We gained several fields about some features of the corporate governance model (i.e. business ethics policy, CEO duality etc.) and about some firm social sustainability issues (i.e. health safety policy, human rights policy etc.) by Bloomberg database (Bloomberg, 2015). The expected findings may show an intriguing relationship between the firm environmental disclosure, as a result of the preparation of IR, and some determinants closely tied to the corporate governance practices and to the compliance with some social sustainability issues. the mandatory adoption of King III therefore may represent an important turning point not only in terms of a new corporate reporting model, such as the IR, but also as a “driver” for potential improvements in firm environmental disclosure.