Improving integrated reporting

CITATION

Massingham, R., Massingham, P., & Dumay, J. (2019). Improving integrated reporting. Journal of Intellectual Capital, 20(1), 60–82.

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ABSTRACT
Purpose – The purpose of this paper is to present a new learning and growth perspective for the balanced
scorecard (BSC) that includes more specific measures of integrated thinking and value creation to help
improve integrated reporting (oIRW). Practical, relevant definitions of these historically vague concepts
may improve intangible asset disclosures (IAD) and increase uptake of theoIRW framework.
Design/methodology/approach – The paper is conceptual. The authors use organisational learning to
theorise about the learning and growth perspective of the BSC, within the context of the practice of IAD.
Findings – Several criticisms of IAD, theoIRWframework and the BSC have acted as barriers to
implementing theoIRWframework. The improved version of the BSC’s learning and growth perspective,
presented in this paper, addresses those criticisms by redefining the concept of integrated thinking (learning)
and more fully connecting that learning to future value creation (growth). The model is designed to be used in
tandem with theoIRWframework to operationalise integrated thinking. A new BSC strategy map illustrates
how this revised learning and growth perspective interacts with the other three BSC perspectives to create
long-term shareholder value through the management and growth of knowledge within an organisation.
Research limitations/implications – Organisational learning is an important source of competitive
advantage in the modern knowledge economy. Here, the authors encourage further debate on how to report and
disclose information on intangible assets, driven by a new conceptual strategy for organisational learning that
fully supports the BSC’s capacity to help integrated thinking and future value creation for theoIRWframework.
Practical implications – From its roots as a performance measurement system, the BSC has become a
widely used strategy execution tool. TheoIRWframework has struggled to gain traction, but still has value
in exploring intangible assets and its disclosure from a systems thinking perspective. The model is designed
to bring an explicit understanding of how to improve integrated thinking for theoIRWframework
facilitating better measurement, management and reporting of human and structural capital. By doing so, the
new model enables a firm to use the BSC to engage withoIRWmore effectively, which should also be useful
for practitioners given the widespread use of the BSC.
Originality/value – The analysis of the BSC’s learning and growth perspective reveals two dichotomies –
one between resources and growth, and another between systems and capability. The revised perspective
resolves these dichotomies with clear, forward-focused measures of learning and intangible asset growth, and
multiple vertical and horizontal connections between the perspective’s four constructs. The authors
demonstrate practical paths to value creation through a range of strategic impacts.


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