Enterprise Risk Management and Integrated Reporting: Is There a Synergism?

Integrated Reporting (IR) and Enterprise Risk Management (ERM) are two ways that have to converge into the “integrated thinking” approach, as both of them push towards a new long-termism in management decisions. Risk management aims to protect company value, this way making the business sustainable over time; so risk issues should be well considered into the integrated report and, in the meantime, company providing the integrated report should demand for the existence of an ERM. Analyzing the companies of the IIRC Pilot Programme we find that: the number of companies filling the IR and contemporaneously adopting the ERM is increasing over time. However, shifting from the traditional to the integrated report doesn’t imply a simultaneous adjustment to an integrated risk management, but when both approaches are present companies have higher performances with respect to those that only do the IR. This evidence supports the hypothesis that ERM can be useful to make the integrated thinking effective.