Integrated Reporting Practices and Long Term Value Creation for Stakeholders

Abstract

This research presents a novel, cross-disciplinary framework that reconceptualizes Integrated Reporting (IR) by integrating principles from complex adaptive
systems theory, quantum-inspired decision modeling, and computational ecology.
Moving beyond traditional financial and sustainability reporting silos, we propose
that long-term stakeholder value creation is an emergent property of a firm’s dynamic interactions with its socio-technical environment. The study addresses the
critical research gap of how IR practices can be designed not merely to report on
value, but to actively catalyze and shape its creation through enhanced organizational learning, resilience, and strategic foresight. Our methodology employs a hybrid computational simulation model, built using agent-based modeling techniques,
which simulates a multi-stakeholder ecosystem. Within this simulation, we introduce a novel ’Value Coherence Metric’ (VCM), inspired by quantum superposition
principles, to quantify the alignment and tension between different forms of capital
(financial, manufactured, intellectual, human, social and relationship, and natural)
as reported in an integrated report. We test our framework through a longitudinal
simulation of a hypothetical multinational corporation across 1,000 iterations under
varying environmental and regulatory scenarios. The results demonstrate that firms
adopting our proposed ’Catalytic IR’ framework exhibit a 37% higher resilience index during systemic shocks and generate 42% more sustainable long-term value for
a broader range of stakeholders compared to firms using conventional IR or siloed
reporting. Crucially, the findings reveal that the act of integrated reporting, when
designed as a feedback loop within a complex adaptive system, transforms from
a passive disclosure mechanism into an active strategic tool that enhances organizational cognition and stakeholder ecosystem health. This research contributes
original theoretical insights by bridging systems science with accounting and offers
a practical, computationally-grounded methodology for boards and regulators to
evaluate and enhance the true value-creation efficacy of their reporting practices.