IR: The Big Promise and the Expectation Gap

Abstract

This chapter will discuss the expectation gaps generated by Integrated Reporting (IR) and, more broadly, the motivations that pushed companies towards IR, the difficulties in its implementation process, and finally its possible benefits. Empirical evidence was gathered through questionnaires distributed to Italian companies and investors. The results of our analysis suggest that companies generally reported some kind of benefit deriving from IR implementation; conversely, investors are not fully satisfied with the way Italian companies are implementing IR. The divergent views between companies and investors suggest that IR has already provided companies with some “internal” benefits, in terms of better internal strategy communication and improvement in integrated thinking. Nevertheless, “external” benefits, in terms of external disclosure, are yet to be achieved, thus generating an investor expectation gap.