Abstract
Method: The demand for a balanced disclosure of quantitative and qualitative value creation in an organisation and for its stakeholders has increased in recent years. Aim: Therefore, this study focused on the disclosure of 97 companies listed on the Johannesburg Stock Exchange over a period of five years (2015–2019). Method: A three-phased content anlaysis was followed. Results: The researchers found that value-creation disclosures are mostly concerned with quantitative value creation, and that they focus on value concepts, such as returns to investors, cash flow, increase in employee numbers, and benefits to employees. Some companies have progressed in their integrated reporting practices and now include a reference to value creation by balancing the different forms of capital. However, their reports still do not include concrete statements or definitions about what value creation is considered to be; neither do they disclose qualitative value-creation concepts. Conclusion: The authors thus conclude that imbalanced reporting skewed towards quantitative value concepts persists.
Highlights
Since the issue of the first International Integrated Reporting Framework (IRF) in 2001, international debates have continued about the concept of value creation, its meaning and how best to define it, the processes involved in creating value, whom value is created for, and how companies should report on these concepts
Value creation for employees is linked to salaries, benefits, and number of employment opportunities created in the form of employee numbers (IIRC 2017; Sunder 2017)
Value for other stakeholders is often quantitatively expressed as the use value for customers, benefits to employees, and Corporate Social Responsibility (CSR) expenditure in relation to communities
Summary
Since the issue of the first International Integrated Reporting Framework (IRF) in 2001, international debates have continued about the concept of value creation, its meaning and how best to define it, the processes involved in creating value, whom value is created for, and how companies should report on these concepts. Conventional approaches to value in an organisation can be found in strategic management literature in the works of authors such as Freeman (2001) and Porter (1980). Terms such as ‘use-value’ and ‘exchange value’ are traditionally linked to value from a consumer perspective, and later research links value creation to the value an organisation creates for shareholders. Several authors acknowledge that the aspects of non-financial value creation or qualitative value creation for employees, such as job satisfaction, job quality, and the impact of leadership on the morale and behaviour of employees are challenging to define and do not receive the much-needed attention in corporate reporting (Freudenreich et al 2019; IIRC 2017; Lev & Sunder 1979)
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