SMEs and IR: Evidence from UK

Small Medium Enterprises (SMEs) are integral to a successful, competitive, and dynamic market-based economy. The UK government encourages SMEs as they add value, create employment, help promote a more diverse business base that strengthens local economy resilience to external shocks. Integrated Reporting (IR) has been something that large businesses have engaged with, and it is something that SMEs will need to address to ensure their future success. IR, with its focus on sustainable development in the guise of meeting the needs of the economy, environment, and society, can help businesses with the recruitment and retention of employees, investors, and customers. Corporate reporting regulations are reviewed to inform an understanding of how SMEs might work with IR. One conclusion drawn is that for SMEs IR should be voluntary so as not to add to the burden on business and to encourage the principle and ideals of “Think Small First.” Preceded by a discussion of macro-environmental factors, the chapter moves on to consider IR guiding principles that are used to report on evidence from large UK companies. With regards to IR, it can be said with a degree of certainty that SMEs in the UK are at the start of a journey. To encourage engagement, a simplified form of IR guidance with accompanying practice-based examples of what can be achieved is needed. Once SMEs begin to engage with IR and to appreciate the benefits it offers, then uptake can be expected to increase and the benefits of “value creation” and “Integrated Thinking” better realised.