Small and Medium-Sized Organisations: Why and How Do They Implement Integrated Reporting?

The chapter addresses the issue of IR implementation and diffusion within SMEs. Among the emerging literature focused on IR, both theoretical arguments and empirical research are almost entirely absent concerning small and medium-sized enterprises. In order to enrich a still under-investigated topic, this work attempts to provide insights and discuss the reasons that can lead an SME to adopt IR and the possible way to reach this goal. After having introduced the theoretical background, the chapter presents the case study that represents a best practice within the Italian context and investigates why and how the selected company decided to perform the journey toward integrated reporting, moving from the corporate social responsibility and sustainability report to the integrated report, as well as the main steps and the current state of the integrated reporting process. Findings point out the positive impact and the importance of some enabling conditions such as: the direct involvement of the top management and entrepreneurial team, the involvement of external consultants in the IR process, and the adoption of a “step by step” approach whose roadmap is spanned throughout several years. Accordingly, the work contributes to enrich the debate on both the benefits and critical issues relative to the diffusion of IR among SMEs, in a research field which has not been adequately investigated. Moreover, it helps in supporting the diffusion of the IR framework among SMEs, practitioners and consultants by emphasizing the opportunities deriving from the implementation of the integrated reporting process.