Towards a legitimate compromise?: An exploration of Integrated Reporting in the Netherlands

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Purpose – The purpose of this paper is to examine the multiplicity of views on integrated reporting and to consider the possibility of, and impediments to, reconciling these multiple rationales (“orders of worth”) and thus gain legitimacy through a compromise. This sheds light on the understanding of integrated reporting as such, as well as shows how legitimacy struggles are resolved in practice around complex accounting practices in heterogeneous environments. Design/methodology/approach – This explorative paper empirically applies Boltanski and The´venot’s sociology of worth (SOW) framework to analyse integrated reporting in the Dutch reporting field. Data were collected using multiple methods, including 64 semi-structured in-depth interviews with a wide range of relevant actors, and documentary analysis. Data were coded for the presence of orders of worth and legitimating compromise mechanisms. Findings – The author’s analysis suggests that integrated reporting combines the disparate domains of industrial, market, civic and green order of worth. These different logics of valuation need to be reconciled in a compromise in order for integrated reporting to become a legitimate practice. Such a compromise requires a common interest, avoidance of clarification and maintenance of ambiguity. The author’s analysis suggests these mechanisms are violated though, with the risk that integrated reporting gets captured by investors and accountants, leading to local private arrangements rather than durable legitimate compromise. Research limitations/implications – First, SOW informs the understanding of integrated reporting. It highlights in particular its fragility as fundamentally different rationales need to be reconciled, which is a challenge yet also gives rise to creative frictions. Second, the SOW framework creates the possibility for scholars to look closer at the dynamics of legitimacy and at the possible mechanisms to attain legitimacy in fragmented and heterogeneous environment. Practical implications – The SOW framework offers tools for practitioners, in particular those working within a pluralistic context. The various mechanisms of compromise discussed in this paper provide practical guidelines for how to manage this complexity and gain or maintain legitimacy. Originality/value – This rich empirical study combines a novel theoretical approach (the SOW framework) with an analysis of the relatively unexplored topic of integrated reporting. At the same time it introduces a conceptualisation of legitimacy that highlights communicative and constitutive dialogue and goes beyond fit and compliance.
Original languageEnglish
Pages (from-to)1157-1189
JournalAccounting, Auditing & Accountability Journal
Volume27
Issue number7
DOIs
Publication statusPublished - 2014

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Compromise
The Netherlands
Integrated
Legitimacy
Sociology
Rationale
Design methodology
Avoidance
Friction
Accounting practices
Fragility
Investors
Empirical study
Multiplicity
Logic
Accountants
Industrial markets
Durables
Impediments
Conceptualization

Bibliographical note

http://dx.doi.org/10.1108/AAAJ-04-2013-1309

Cite this

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title = "Towards a legitimate compromise?: An exploration of Integrated Reporting in the Netherlands",
abstract = "Purpose – The purpose of this paper is to examine the multiplicity of views on integrated reporting and to consider the possibility of, and impediments to, reconciling these multiple rationales (“orders of worth”) and thus gain legitimacy through a compromise. This sheds light on the understanding of integrated reporting as such, as well as shows how legitimacy struggles are resolved in practice around complex accounting practices in heterogeneous environments. Design/methodology/approach – This explorative paper empirically applies Boltanski and The´venot’s sociology of worth (SOW) framework to analyse integrated reporting in the Dutch reporting field. Data were collected using multiple methods, including 64 semi-structured in-depth interviews with a wide range of relevant actors, and documentary analysis. Data were coded for the presence of orders of worth and legitimating compromise mechanisms. Findings – The author’s analysis suggests that integrated reporting combines the disparate domains of industrial, market, civic and green order of worth. These different logics of valuation need to be reconciled in a compromise in order for integrated reporting to become a legitimate practice. Such a compromise requires a common interest, avoidance of clarification and maintenance of ambiguity. The author’s analysis suggests these mechanisms are violated though, with the risk that integrated reporting gets captured by investors and accountants, leading to local private arrangements rather than durable legitimate compromise. Research limitations/implications – First, SOW informs the understanding of integrated reporting. It highlights in particular its fragility as fundamentally different rationales need to be reconciled, which is a challenge yet also gives rise to creative frictions. Second, the SOW framework creates the possibility for scholars to look closer at the dynamics of legitimacy and at the possible mechanisms to attain legitimacy in fragmented and heterogeneous environment. Practical implications – The SOW framework offers tools for practitioners, in particular those working within a pluralistic context. The various mechanisms of compromise discussed in this paper provide practical guidelines for how to manage this complexity and gain or maintain legitimacy. Originality/value – This rich empirical study combines a novel theoretical approach (the SOW framework) with an analysis of the relatively unexplored topic of integrated reporting. At the same time it introduces a conceptualisation of legitimacy that highlights communicative and constitutive dialogue and goes beyond fit and compliance.",
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Towards a legitimate compromise?: An exploration of Integrated Reporting in the Netherlands. / van Bommel, K.

In: Accounting, Auditing & Accountability Journal, Vol. 27, No. 7, 2014, p. 1157-1189.

Research output: Contribution to JournalArticleAcademicpeer-review

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