Strategy disclosure reporting trends in South Africa: A 2010–2011 comparative analysis for six industry clusters

Abstract

Strategy disclosure through integrated reporting relates to a firm’s transparency and accountability in dealing with stakeholders. This study is a follow-up study on the 2010 strategy disclosure findings reported by Ungerer (2013), and the study aims to create comparative views and to further evaluate the feasibility of measuring strategy disclosure levels using multiple baseline perspectives. A comparative analysis for six industry clusters in South Africa is presented. Strategy disclosures for 2010 and 2011 are measured against three baselines, namely the third generation Global Reporting Initiative (GRI G3) Guidelines (Baseline 1), a strategic architecture framework (Baseline 2) and a business model framework (Baseline 3). The six industries, each consisting of fi ve JSElisted companies, are banking, construction, energy, insurance, mining and retail. Strategy disclosure, in aggregate, improved from 65% to 73% between 2010 and 2011. Given variances in disclosure for the various industries and against different strategic element sub-scales, different priorities can be identified for improving disclosure through integrated reporting. When disclosure against different baselines is compared, it becomes apparent that disclosure of forward-looking strategic themes and those related to the competitive strategy sub-scale represent the major themes for improvement in strategy disclosure practices. On balance, however, there are positive trends towards greater transparency and improved accountability to stakeholders. This coincides with the introduction of the King III compliance regime for integrated reporting, as well as meaningful organisational learning and capacity building towards GRI G3 disclosure.

Key words: business model, integrated reporting, Global Reporting Initiative, King III, stakeholders, strategic architecture, strategy disclosure, transparency