The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality

Chapter 1South Africa

In 2011, South Africa became the first country to require integrated reporting on an “apply or explain” basis.¹ In 2014, it remains the only country to have done so. Since the Johannesburg Stock Exchange (JSE) added King III to its listing requirements—which as of 2011 have included integrated reporting—some 450² South African companies have been filing reports that present both financial and nonfinancial information³ in a meaningful way. While a variety of proposals related to sustainability and integrated reporting have been submitted in countries of the European Union,⁴ and while an initiative by the World Federation of Exchanges slated for discussion in 2014⁵ would require some form of nonfinancial reporting,⁶ no other country has shown signs of implementing such a far-reaching requirement.

Those not deeply entrenched in the topics of corporate governance and reporting are often surprised to learn that South Africa is the first country where integrated reporting was given a widespread mandate. Indeed, in 20 years the country's corporate governance code went from being undeveloped to regarded as an international vanguard. The governance principles that would launch South Africa's integrated reporting journey coincided with the country's first multiracial elections in 1994. In codifying values of stakeholder inclusivity—the idea that nonshareholder interests and expectations should be taken into account during strategic decision-making—those principles ...