Ethical communication on society issues: a story from Indonesia

Abstract

Purpose

This paper aims to examine Indonesia Stock Exchange (IDX)-listed companies’ society disclosures.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Citation

Hanifa, A. and Cahaya, F.R. (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-09-2015-0020