This paper aims to examine Indonesia Stock Exchange (IDX)-listed companies’ society disclosures.
Year-ending 2012 annual report disclosures of 75 IDX-listed companies are analyzed. The widely acknowledged Global Reporting Initiative guidelines are used as the disclosure index checklist.
The results show a relatively low level of voluntary society disclosure (40.27 per cent). The highest level of communication is for issues related to society programs. Very few companies disclosed information about public policy, donations to political parties and actions taken in response to corruption incidents. Statistical analysis reveals that company size is a positively significant predictor of “society” communication. Ethical stakeholder theory partially explains the variability of these disclosures.
The main implication of the findings is that Indonesian companies are not involved in the public policy-making process. Companies also probably attempt to hide certain information regarding corruption issues to protect their image and reputation.
This paper provides insights into the disclosure practices of society issues, a specific social disclosure theme which is rarely examined in prior literature, within the framework of ethical stakeholder theory. The research also includes corruption issues to be investigated in the disclosure analysis.
The authors would like to thank participants at the 2014 GECAMB Conference (the Portuguese Conference on Environmental Management and Accounting) for their insightful comments on an earlier version of this paper. The authors are also grateful for comments and suggestions from Professor Rob Gray (University of St Andrews), Professor Den Patten (Illinois State University) and Neni Meidawati (Universitas Islam Indonesia).
Hanifa, A. and Cahaya, F. (2016), "Ethical communication on society issues: a story from Indonesia", Journal of Global Responsibility, Vol. 7 No. 1, pp. 39-55. https://doi.org/10.1108/JGR-09-2015-0020Download as .RIS
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