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Article
Publication date: 9 August 2011

Clodia Vurro and Francesco Perrini

Examining a three‐year disclosure experience of a sample of Fortune 100 global companies, the paper aims to propose and test a model that relates the structure of CSR

Abstract

Purpose

Examining a three‐year disclosure experience of a sample of Fortune 100 global companies, the paper aims to propose and test a model that relates the structure of CSR disclosure to corporate social performance. Based on the results obtained, it proposes to draw implications for emerging economies.

Design/methodology/approach

Combining content analysis of CSR reports and corporate social performance data, the paper built a longitudinal dataset starting from the population of worldwide companies included in the AccountAbility Rating between 2004 and 2007. Longitudinal regression analysis is performed on a final sample size of 114 firm‐year observations involving 38 firms over a three‐year period.

Findings

The paper finds evidence that the level of disclosure does not improve firm ability to manage stakeholders. However, a finer‐grained analysis of the structure of disclosure shows that better social performers are those who increased the breadth of their disclosure to stakeholders and uniformly distributed disclosure across stakeholders.

Research limitations/implications

Results provide an empirical test for the theories describing true responsible economic actors as those who are able to combine high engagement with the social context of reference and balanced coverage of diversified interests. However, the study suffers the usual limitations of content analysis‐based research, as well as exclusively relying on CSR disclosure by large corporations.

Practical implications

Findings suggest not only the importance of structuring the report in a comprehensive way, and extending coverage to multiple stakeholders and related issues, but also the need for balance between informative needs, thus avoiding concentrated structures. Accordingly, companies that report on more themes, presenting a balanced and comprehensive product, develop a better ability to manage their stakeholder network, thus gaining higher corporate social performance.

Originality/value

The study seeks to revisit the relation between CSR disclosure and corporate social performance, answering the request for more rigorous measures. It goes beyond the level of disclosure as a comprehensive proxy of firm‐stakeholder dialogue and demonstrates how a finer‐grained analysis of the structure of disclosure can be a better predictor of superior performance.

Details

Corporate Governance: The international journal of business in society, vol. 11 no. 4
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 19 January 2015

Charles H. Cho, Giovanna Michelon, Dennis M. Patten and Robin W. Roberts

Corporate social responsibility (CSR) disclosure is receiving increased attention from the mainstream accounting research community. In general, this recently published…

Abstract

Purpose

Corporate social responsibility (CSR) disclosure is receiving increased attention from the mainstream accounting research community. In general, this recently published research has failed to engage significantly with prior CSR-themed studies. The purpose of this paper is threefold. First, it examines whether more recent CSR reporting differs from that of the 1970s. Second, it investigates whether one of the major findings of prior CSR research – that disclosure appears to be largely a function of exposure to legitimacy factors – continues to hold in more recent reporting. Third, it examines whether, as argued within the more recent CSR-themed studies, disclosure is valued by market participants.

Design/methodology/approach

Using Fortune 500 data from the late 1970s (from Ernst & Ernst, 1978) and a more recent sample (2010), the authors identify differences in CSR disclosure by computing adequate measures in terms of disclosure breadth and comparing them for any potential changes in the influence of legitimacy factors between 1977 and 2010. In the second stage of the analysis, the authors use a standard valuation model to compare the association between CSR and firm value between the two time periods.

Findings

The authors first find that the breadth of CSR disclosure increased significantly, with respect to both environmental and social information provision. Second, the authors find that the relationship among legitimacy factors and CSR disclosure does not differ across the two time periods. However, the analysis focusing on environmental disclosure provides evidence that industry membership is less powerfully related to differences in reporting, but only for the weighted disclosure score. Finally, the results indicate that CSR disclosure, in apparent contrast to the arguments of the more recent mainstream investigations, is not positively valued by investors.

Research limitations/implications

The authors explore changes in CSR disclosure only for industrial firms and as such the authors cannot generalize findings to companies in other industries. Similarly, the authors focus only on companies in the USA while different relationships may hold in other countries. Further, the disclosure metrics are limited by the availability of firm-specific information provided by Ernst & Ernst. Limitations aside, however, the findings appear to suggest that the failure of the new wave of CSR research in the mainstream accounting community to acknowledge and consider prior research into social and environmental accounting is potentially troublesome. Specifically, recent CSR disclosure research published in mainstream journals often lends credence to voluntary disclosure arguments that ignore previous contradictory findings and well-established alternative explanations for observed empirical relationships.

Practical implications

This paper provides supporting evidence that the unquestioned acceptance by the new wave of CSR researchers that the disclosure is about informing investors as opposed to being a tool of legitimation and image enhancement makes it less likely that such disclosure will ever move meaningfully toward transparent accountability.

Originality/value

The study suggests that CSR disclosure, while used more extensively today than three decades ago, may still largely be driven by concerns with corporate legitimacy, and still fails to provide information that is relevant for assessing firm value. As such, the failure of the mainstream accounting community to acknowledge this possibility can only hinder the ultimate development of better accountability for all of the impacts of business.

Details

Accounting, Auditing & Accountability Journal, vol. 28 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 12 May 2021

Sourour Hamza and Anis Jarboui

The purpose of this paper is to investigate to what extent corporate social responsibility (CSR) is used as a symbolic strategy of greenwashing. Analyses focus on the…

Abstract

Purpose

The purpose of this paper is to investigate to what extent corporate social responsibility (CSR) is used as a symbolic strategy of greenwashing. Analyses focus on the relationship between CSR and disclosure tone management practice in sustainable reports derived from social impression management incentives.

Design/methodology/approach

This study is based on a sample of French listed firms (SBF 120) over a seven-year period (2010–2016), i.e. 539 firm-year observations.

Findings

Multivariate analysis indicates a significant relationship between CSR and disclosure tone management. The obtained results show that firms that are less concerned with tone management in sustainable reporting process consider more socially responsible issues. Findings support the socially substantive initiatives and the transparency perspective of CSR.

Research limitations/implications

The negative association between CSR and tone management highlights the firm’s transparency. However, there could be other discretionary practices which may determine impression management strategies. Thus, future research may consider other discretionary behavior associated with CSR to mislead users.

Practical implications

All actors (government, green-association, investors, etc.) interested in CSR and greenwashing issues have to bring initiatives to reinforce the monitoring and reporting procedures.

Originality/value

This study investigates the association between CSR and disclosure tone management for the French context since the specificity of its regulatory framework of CSR disclosure. Thus, corporate narrative reporting users may be required to consider impression management practices (i.e. tone management) and read between the lines.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 18 November 2013

Yuanhui Li, Jie Zhang and Check-Teck Foo

Here, the paper aims to model major corporate characteristics associated with corporate social responsibility (CSR) reporting (in particular, its quality). Corporations in…

Abstract

Purpose

Here, the paper aims to model major corporate characteristics associated with corporate social responsibility (CSR) reporting (in particular, its quality). Corporations in China are increasingly expected by the public and government to be more socially responsible. As such, it will be intriguing to ask, what are the characteristics associated with higher quality CSR reporting?

Design/methodology/approach

CSR report quality scores are hand-gathered from HEXUN (web site) whilst financial and stock market information from the China Stock Market and Accounting Research (CSMAR) database. A total of 613 CSR reports' quality scores were utilized (Rankins CSR ratings) in the process of developing the model. Reports are hand-gathered from corporations listed on both the Shenzhen and Shanghai stock exchanges (SSE).

Findings

The results suggest most interestingly, the quality of CSR report (mandatory) to be strongly, positively related with corporate financial characteristics: market capitalization (corporate size), shareholders' concentration of powers, corporate financial leverage (implying bondholders/debtors' influence). Surprisingly, CSR reporting is associated neither with corporate profitability nor by state-ownership. The presence of independent directors (at least in China) seems to have negative influences.

Practical implications

CSR reporting may easily be mandated by government through a regulatory process. However, this does not necessarily lead to reports of a high quality. Instead, orientation towards higher visibility in social responsibility for listed corporations is better explained by financial characteristics: market valuation, ownership and leverage.

Originality/value

This paper utilizes for the first time, in-depth and multi-faceted quality CSR scores (overall, segregated into macro-social, content and technology) for investigating CSR behavior of listed corporations in China. The findings suggest financial characteristics size (market valuation), ownership (shareholders' concentration of powers) and corporate leverage are better predictors of CSR behavior among listed corporations.

Details

Chinese Management Studies, vol. 7 no. 4
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 3 October 2016

Barry Ackers

In South Africa, King III requires companies to have their corporate social responsibility (CSR) disclosures independently assured. Within this context, the purpose of…

Abstract

Purpose

In South Africa, King III requires companies to have their corporate social responsibility (CSR) disclosures independently assured. Within this context, the purpose of this paper is to examine internal audit’s CSR assurance role.

Design/methodology/approach

With reference to the International Professional Practices Framework of the Institute of Internal Auditors, the first phase of the study conceptually considers whether internal audit does qualify as an independent CSR assurance provider. Using a content analysis of integrated reports, the second phase examines the extent to which internal audit’s CSR assurance role has been disclosed. The final phase relies on survey responses to understand the emerging trends observed in the second phase.

Findings

The study finds that although internal audit does provide independent CSR assurance, this assurance is primarily intended for internal stakeholders to assist in improving the quality of CSR reporting practices. With one notable exception across the study period, the results suggest that any benefits accruing to external stakeholders were not deliberate, but merely incidental. The paper concludes by arguing that although internal audit will continue to incorporate material CSR issues into its mandatory risk-based auditing approach, the results will not necessarily be publicly available. The extent of reliance that external stakeholders can place on company CSR disclosures are therefore not directly influenced by internal audit’s involvement in CSR-related matters. However, by adopting a proactive CSR role, internal audit can assist reporting companies improve their CSR reporting practices.

Originality/value

Although CSR assurance has been extensively researched, this is one of the first studies to specifically consider the CSR assurance role of the internal audit activity. Despite its South African orientation, given the emerging nature of the CSR assurance phenomenon, the study findings have global implications.

Details

Social Responsibility Journal, vol. 12 no. 4
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 1 March 2013

Jenny Guan and Carlos Noronha

The aim of this paper is to review the recent corporate social responsibility (CSR) literature in China, which has the world's largest developing economy. Through…

Abstract

Purpose

The aim of this paper is to review the recent corporate social responsibility (CSR) literature in China, which has the world's largest developing economy. Through discussions and critical review, the objective is to suggest future directions for CSR research in this country.

Design/methodology/approach

The paper starts with a review of recent CSR literature in the mainland, followed by an in‐depth critique of two major Chinese CSR studies conducted by the Chinese Academy of Social Sciences.

Findings

In China, much of the CSR literature is conceptual, descriptive, or argumentative in nature. Proper research methodologies are not systematically applied in some studies, and supporting theories are lacking. Besides, self‐developed indicator systems, rather than internationally adopted systems, are used as the mainstream measurement tools in research focusing on CSR performance evaluation. In general, CSR research in China has just got started and has a long way to go.

Originality/value

Recent reviews of CSR literature have concentrated on emerging economies, particularly Bangladesh, India, Indonesia, Malaysia, and so on. This paper is one of the first reviews of CSR studies in mainland China. It contributes to understanding the development of Chinese CSR research. After the review and discourse, several research questions are suggested for future research.

Details

Social Responsibility Journal, vol. 9 no. 1
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 18 August 2020

Shaban Mohammadi, Hadi Saeidi and Nader Naghshbandi

The purpose of this study is to investigate the effect of board and audit committee characteristics on corporate social responsibility (CSR) in Iranian companies listed in…

Abstract

Purpose

The purpose of this study is to investigate the effect of board and audit committee characteristics on corporate social responsibility (CSR) in Iranian companies listed in stock exchanges.

Design/methodology/approach

This is a descriptive-correlational and an applied research. The statistical population of this research is all companies listed in Tehran Stock Exchange and the research period is from 2012 to 2018. Using screening method a sample of 150 companies was selected. Multivariate regression and the software Eviews 10 were used for data analysis and hypothesis testing.

Findings

The results indicated that board size had a significant effect on CSR; board independence had a significant effect on CSR; managerial ownership did not have a significant effect on CSR; CEO duality did not have a significant effect on CSR; audit committee size had a significant effect on CSR; audit committee independence had a significant effect on CSR; and financial expertise of audit committee members had a significant effect on CSR.

Originality/value

The present study is the first research performed on the effect of board and audit committee characteristics on CSR in Iran. The results of this study contribute to the literature on the effect of board and audit committee characteristics on CSR and provide suggestions for capital market participants. CSR helps reduce asymmetric distribution of information among the internal and external organizational entities and reduce agency problems and conflicts among different groups. Based on the results, an effective audit committee as an effective mechanism enhances the credibility of financial and non-financial reporting such as social responsibility, which means that an effective audit committee can improve the level of voluntary disclosure of information through effective oversight of the reporting process. It is also suggested that companies focus on audit committee characteristics to increase the level of CSR.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 28 February 2020

Mark D. Sheldon and J. Gregory Jenkins

This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental…

Abstract

Purpose

This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental activities under the recently clarified and recodified attestation standards in the United States.

Design/methodology/approach

The paper uses a 2 × 3 between-subjects experiment to identify differences in 153 non-expert environmental report users' perceptions of report believability based on positive or negative firm performance and (level of) assurance provided by an accounting firm.

Findings

Results show a main effect in that negative performance reports are perceived to be more believable than positive performance reports, as driven by negative performance reports being significantly more believable when no assurance is present. The firm performance effect is eliminated once limited or reasonable assurance is provided. Further, positive performance reports with limited, but not reasonable, assurance are perceived to be more believable than reports without assurance. No differences are identified within the negative performance condition.

Practical implications

Limited assurance might be used as an impression management tool to enhance the believability of positive performance environmental reports. Users, practitioners, and standard-setters should also be aware that users might believe environmental reports are assured, even when no such assurance has been provided.

Originality/value

This paper examines the impact of assured environmental reporting on users that review firms' environmental reports outside of a shareholder/investor role. The study also demonstrates conditions in which firm performance and assurance impact perceptions of report believability.

Details

Accounting, Auditing & Accountability Journal, vol. 33 no. 3
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 3 July 2017

Orhan Akisik and Graham Gal

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social…

Abstract

Purpose

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social responsibility (CSR) reports and assurance on the quality of internal controls as value determinant in their decisions, and how their decisions influence financial performance through the halo effect of these reports.

Design/methodology/approach

Using Compustat North America and Global Reporting Initiative data, the authors used first-order autoregressive models over the period from 2006 to 2012.

Findings

The results indicate that the impacts of customers and employees on financial performance are influenced by third party-reviewed CSR reports and effective internal control. Moreover, it is found that the third party-reviewed CSR reports and effective internal control enable the persistence of financial performance.

Social implications

The findings have implications for stakeholders in terms of third party-reviewed CSR reports and effective internal control. The findings are important due to the influence that these stakeholders (customers and employees) have on the financial performance of firms and the impact that CSR actions can have on society as a whole.

Originality/value

To the authors' knowledge, this is the first study that contributes to the literature by demonstrating that information about third party-reviewed CSR reports and internal control reviews may influence the perceptions of firms by two primary stakeholders – customers and employees.

Details

Sustainability Accounting, Management and Policy Journal, vol. 8 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

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Article
Publication date: 15 December 2020

Kofi Mintah Oware and Thathaiah Mallikarjunappa

The purpose of this study is to examine the moderating effect of mandatory corporate social responsibility (CSR) reporting on CSR expenditure and financial performance of…

Abstract

Purpose

The purpose of this study is to examine the moderating effect of mandatory corporate social responsibility (CSR) reporting on CSR expenditure and financial performance of listed firms in India. It uses institutional theory to explain the relationship.

Design/methodology/approach

The study used the Indian stock market as the testing grounds and applied descriptive statistics, hierarchical regression and panel regression with fixed effect assumptions for 800 firm-year observations for the period 2010 to 2019.

Findings

The study shows a positive and statistically significant association between CSR expenditure and financial performance [return on assets (ROA) and Tobin’s q]. Also, the study shows a positive association between financial performance (ROA and Tobin’s q) and CSR expenditure. Furthermore, the study shows that mandatory CSR reporting leads to an increase in CSR expenditure. Finally, the study shows that mandatory CSR reporting moderates the association between CSR expenditure and financial performance stock price returns). The study control for any form of heteroscedasticity, serial correlation and endogeneity effects.

Research limitations/implications

The study used one country data to represent the emerging economies. The use of one country data can limit the generalisation of the study.

Originality/value

Different studies have examined mandatory CSR reporting association with CSR disclosure or financial performance. However, this study takes the discussion further and contribute a novelty to sustainability development studies with the examined moderating effect of mandatory CSR reporting in the association between CSR expenditure and financial performance.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

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