The purpose of this paper is a quantitative exploration of the annual report disclosure of contributions by Australian corporations to the relief appeal following the South-East Asian tsunami of 26 December 2004.
Hypotheses are developed from legitimacy and media agenda setting perspectives, predicting relationships between financial characteristics of the corporations and of their contributions with respect to presence and volume of content and extent of disclosure of cash amounts. The effect of public awareness of contributions on disclosure variables is also examined. Hypotheses not supported are re-examined from an agency perspective.
Most correlations, such as company size and volume of content, are found to be consistent with a legitimacy perspective, while those not supported, such as company profit disclosure of cash amounts, can readily be explained from an accountability perspective. Overall, the results indicate a strong relationship between public awareness of the contributions and disclosing behaviour. Size of company and profit were related to some aspects of disclosure, while no relationship was detected between the size of the cash donation and disclosing behaviour.
The findings have important implications for studies of the way in which corporations communicate with their shareholders and other stakeholders when conflicting interests exist and when media exposure has been positive. The results cannot be extrapolated to situations beyond the Tsunami Appeal.
Empirical research into the disclosure of corporate philanthropy by Australian corporations. Consideration of appropriate theoretical frameworks for study of corporate philanthropy disclosure.
The author wishes to thank Professor Carol A. Tilt for her wise support and encouragement. Thanks also to Mr Graham Jones for his insights into corporate philanthropy and Ms Yen Bui for reviewing the manuscript.
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