Lifting the Veil: Integrated Reporting, Materiality Determination, and Stakeholder Inclusivity
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Materiality is constructed within the critical accounting literature as a fractured and disputed concept and practice. Within this literature, materiality is simultaneously re-presented as a technical-rational and objective ‘truth’, a shield for questionable reporting and assurance practices, and a paternalist, protectionist tool used to deliberately veil and mythologise the workings of the accounting profession. Increasingly, ‘other’ stakeholders outside of the accounting profession are being brought into this messy, conflictual, and veiled space. However, it is unclear how, or to what extent materiality and materiality determination processes are actually open to alternative stakeholder voices. In this research I examine materiality and stakeholder inclusivity within an integrated reporting context that appears to forward stakeholder engagement within materiality determination processes. This research embraces a political, power-laden materiality. Through engaging preparers, consultants and assurors (integrated reporting participants), or those in a position of greater relative power in integrated reporting materiality determination processes (materiality processes), I bring dominant framings of materiality, and materiality processes ‘into the light’. By examining the perceptions these integrated reporting participants have towards the role of stakeholders, and how stakeholders are perceived to be included within materiality processes, I further explore to what extent these processes are open to the liberation of stakeholders and their voices. This exploration is informed by Freire’s (2005) conceptions of banking and dialogic education, and the explicit theorisation of materiality processes as spaces where education between the integrated reporting participants and stakeholders, can and does take place. This research examines the perceptions of (16) integrated reporting participants through a Q methodology (Q) and semi structured interview approach. Eleven further financial and nonfinancial preparers, consultants, assurors, standard setters, and accounting academics were engaged in semi structured interviews to inform the Q component of the research method. Through the use of Q, this research finds that integrated reporting participants are largely united in a collective, subjective understanding of materiality: an understanding that privileges their own voices and strategic organisational agendas. Though semi structured interviews reveal the majority of integrated reporting participants engage with stakeholders in their materiality processes, this research finds that stakeholders’ voices are interpreted through an organisational framed lens. Stakeholders are further perceived to hold largely compliant, passive, and silent roles within materiality processes. A Freirean-informed critical evaluation and analysis of the key research findings reveals that materiality processes, as educative spaces, oppress, rather than liberate stakeholders and their voices. They are found to be more reflective of conceptions of banking education than dialogic spaces. Drawing on Freire’s (2005) conception of dialogic education I further deliberate on alternative, dialogic framings of materiality and materiality processes that promote the liberation of stakeholders and their voices. This research contributes to the use of Freire (2005) within critical dialogic literature through the explicit theorisation of materiality processes as educative spaces. This research further extends conceptualisations of Freirean oppression with critical dialogic literature through theorising oppressive relationships in a space that is not outwardly or explicitly oppressive. This research also contributes to the use of Q in critical accounting research through allowing subjective understandings to be constructed by the integrated reporting participants themselves, rather than relying on existing typologies. The dominant, collective understanding of materiality within the integrated reporting participant group further challenges existing critical materiality literature that presents materiality as a fractured and contested concept. This research has further implications for integrated reporting practice, as the integrated reporting participants rely on their own subjective understandings of materiality to inform their materiality processes and stakeholder engagement, as opposed to referencing available integrated reporting guidance.