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Article

M. Karim Sorour, Philip J. Shrives, Ahmed Ayman El-Sakhawy and Teerooven Soobaroyen

This paper seeks to investigate to what extent (and why) CSR reporting in developing countries reflect instrumental and/or “political CSR” motivations and the types of…

Abstract

Purpose

This paper seeks to investigate to what extent (and why) CSR reporting in developing countries reflect instrumental and/or “political CSR” motivations and the types of organisational legitimacy sought in these circumstances.

Design/methodology/approach

We adopt a theoretical framework based on neo-institutional theory, “political CSR” framework and types of organisational legitimacy. This interpretive research is set in the Egyptian context post-2011 revolution. We first carry out a content analysis of web disclosures for 40 banks in 2013 and 2016 to ascertain the nature of CSR activities and any changes over time. Second, we draw on 21 interviews to tease out the implications of the change in societal expectations due to the revolution and to deepen our understanding of the organisational motivations underlying CSR reporting.

Findings

Following the 2011 revolution, the banks’ CSR reporting practices have gradually shifted from a largely instrumental “business-case” perspective towards a more substantive recognition of a wider set of societal challenges consistent with a political CSR perspective. Overall, the maintaining/gaining of legitimacy is gradually bound to the communication of accounts about the multi-faceted socially valued consequences or structures performed by banks. Our interview data shows that participants reflected on the legitimation challenges brought by the revolution and the limits of transactional strategies involving traditional constituents, with a preference for pursuing consequential and structural forms of moral legitimacy.

Research limitations/implications

This study demonstrates a constructive shift by businesses towards engaging with the new social rules in response to sociopolitical changes and the need to achieve moral legitimacy. Hence, policymakers and stakeholders could consider engaging with different economic sectors to foster more transparent, accountable, and impactful CSR practices.

Originality/value

We highlight the implications of Scherer and Palazzo’s political CSR approach for accountability and CSR reporting. CSR reporting in some developing countries has typically been seen as peripheral or a symbolic exercise primarily concerned with placating stakeholders and/or promoting shareholders’ interests. We suggest that researchers need to be instead attuned to the possibility of a blend of instrumental and normative motivations.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

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Book part

Nuha Ceesay, Moade Shubita and Fiona Robertson

Purpose: The purpose of this chapter is to establish the sustainability reporting practices of FTSE 100 companies using integrated reporting (IR), corporate social…

Abstract

Purpose: The purpose of this chapter is to establish the sustainability reporting practices of FTSE 100 companies using integrated reporting (IR), corporate social responsibility (CSR) and corporate governance (CG) as proxies. Our study has adopted a holistic approach by combining dimensions of each factor in one variable.

Design/Methodological Approach: The study data cover all FTSE 100 companies over five years, thereby generating 505 company-year observations for each variable of the study. Authors have collected the data from Environmental, Social and Governance (ESG) reports filed with Thomson Reuters and International Integrated Reporting Council (IIRC).

Findings: Results indicate the practice of sustainability reporting in FTSE 100 companies both per variables and dimensions levels. It shows, for example, 89% of the companies reported on their charitable donations. The study also found that 79% of the FTSE 100 companies reported on their sustainability committees whilst 86% and 85% reported on their emission reduction and waste reduction policies, respectively. Results show that the CSR impact is higher than CG regarding IR adoption. The Logistic Model manages to explain a high percentage of IR adoption while controlling for other misspecification issues such as multicollinearity.

Practical Implication: The study highlights practice of substantiality reporting for public shareholding companies listed on FTSE 100 Index along with interaction among proxies. These will be of interest to companies not only in the FTSE 100 Index but also those outside. Companies can rely on these factors to strengthen their governance, social responsibility and reporting policies in consideration of all stakeholders and not just a few. We believe that we shed a quantitative explanation on IR adoption by CSR and CG factors, and we expect an impact on practices following results of our study.

Social Implication: Results have indicated that at least 60% of companies in the FTSE 100 Index have imbedded social responsibility activities, such as charitable giving, waste reduction initiatives, emissions reduction policy and sustainability committees.

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Book part

Annkatrin Mies and Peter Neergaard

In 2014, the European Union (EU) adopted the non-financial reporting Directive (2014/95/EU) making the disclosure of certain non-financial topics mandatory for large…

Abstract

In 2014, the European Union (EU) adopted the non-financial reporting Directive (2014/95/EU) making the disclosure of certain non-financial topics mandatory for large listed companies. They are required to report on policies, actions and outcomes regarding their environmental impact, social and employee matters, impact on human rights and corruption. Denmark introduced mandatory corporate social responsibility (CSR) reporting already in 2009, while Germany had no specific legislation on CSR reporting before 2017. Some authors allege that regulation positively impacts CSR reporting, while others argue that the voluntary nature of CSR reporting is essential (Romolini, Fissi, & Gori, 2014). Critics of mandatory reporting claim that non-financial reporting should develop bottom-up, as mandatory one-size-fits-all solutions are inappropriate given the differences among companies (ICC, 2015). The aim of this chapter is to evaluate the effect of legislation on reporting quality by comparing Denmark with a long tradition for mandatory reporting and Germany introducing mandatory rather recently. However, a rich body of literature exists on factors impacting CSR reporting other than legislation. These are among others: firm size, ownership structure, industrial sector and culture (Hahn & Kühnen, 2013.)

The chapter applies a content analysis of 150 CSR reports from German and Danish listed companies between 2008 and 2017 from four different industrial sectors. The chapter finds that mandatory reporting improves overall report quality by lifting the quality floor, yet, without lifting the quality ceiling. Size is important as improvements in reporting are largest in small and medium-sized companies. Companies in environmentally sensitive sectors tend to disclose more relevant environmental information than companies in less sensitive sectors. Both culture and ownership structure has a moderating effect on report quality.

Details

Governance and Sustainability
Type: Book
ISBN: 978-1-80043-151-5

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Book part

Hyemi Shin and Adrián Zicari

This chapter explores the adaptation and evolution of stand-alone CSR reporting in two different political economies and late-capitalist countries: Brazil and South Korea…

Abstract

Purpose

This chapter explores the adaptation and evolution of stand-alone CSR reporting in two different political economies and late-capitalist countries: Brazil and South Korea. Instead of selecting between new institutionalism and the varieties of capitalism (VOC) approach, this study attempts to explore how the interaction between converging and diverging pressures appears in the adaptation and evolution of stand-alone CSR reporting (i.e., cross-fertilization process) in two countries.

Design/methodology/approach

Using qualitative content analysis this study focuses on the frameworks of CSR reports and the way CSR issues are described within the stand-alone CSR reports of four telecommunication companies in Brazil and South Korea.

Findings

Even though CSR reports in both countries have become similar due to the convergence of frameworks of CSR reporting, the key themes and the representation on each theme are still embedded within each form of market economy: a hierarchical market economy (HME) in Brazil and a network market economy (NME) in South Korea. From a cross-fertilization perspective, this chapter shows that the adaptation and evolution of CSR reporting occurs at two different levels of CSR reporting.

Value

This study has three major values. First, it explains the two different levels of the adaptation and evolution process of CSR reporting by bringing a dynamic cross-fertilization view. Second, it provides a qualitative study that focuses on the content of CSR disclosures instead of the quantity of those disclosures. Lastly, it contributes to the academic and practical research on CSR in late-capitalist countries and in two under-researched types of political economies.

Details

Sustainability Accounting
Type: Book
ISBN: 978-1-78754-889-3

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Article

Afzalur Rashid

This study aims to examine the association between board independence and corporate social responsibility (CSR) reporting and the moderating role of stakeholder power on…

Abstract

Purpose

This study aims to examine the association between board independence and corporate social responsibility (CSR) reporting and the moderating role of stakeholder power on the association between board independence and CSR reporting.

Design/methodology/approach

Using a sample of 707 Bangladeshi firm-year observations, this study uses a content analysis technique to develop a 24-item of CSR reporting index. This study uses the ordinary least squares regression method to examine the relationship between board independence and CSR reporting.

Findings

The study finds that board independence does not influence CSR activities and relevant reporting in general. However, the non-influence of board independence and CSR reporting is offset by stakeholder power. Insider ownership, firm age, firm size, growth opportunities and market capitalisation have a positive influence on such reporting.

Practical implications

While this study suggests that stakeholders’ influence is an important factor in determining the firms’ incentives to disclose CSR information, this finding creates a new debate on the efficacy of independent directors and whether they are good monitors and are able to fulfil all the stakeholders’ expectations.

Originality/value

This study makes an important contribution to the literature on CSR practices by documenting that firms having powerful stakeholders induce the board and management to make more CSR reporting practices in the context of emerging economies.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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Article

Leila Emily Hickman and Jane Cote

Drawing on new insights from the experiences and perspectives of a prominent reporting client and its assurance team, the purpose of this paper is to explore the question…

Abstract

Purpose

Drawing on new insights from the experiences and perspectives of a prominent reporting client and its assurance team, the purpose of this paper is to explore the question: what are challenges to the legitimacy of corporate social responsibility (CSR) reporting and assurance?

Design/methodology/approach

Using a qualitative research approach, in-depth, semi-structured interviews are conducted with a Fortune 200 firm’s Vice President responsible for CSR oversight (including CSR reporting), and with the report’s assurance team from a Top 20 accounting firm. Questions are informed by existing literature, and analysis focuses on new insights that conform to, or contrast with, prior studies in areas that may challenge the legitimacy of CSR reporting.

Findings

The study documents that reporting and assurance may often serve the respective commercial and professional interests of the firm and the assuror, rather than providing accountability to the public interest. Specifically, the authors find that legitimacy-challenging instances of managerial capture of CSR reporting may co-exist in a firm with management-as-CSR-champion, in contrast with existing literature. Prior research has assumed these two constructs are not likely to co-exist within a single organization. The interviews suggest that managerial influence is fostered by the lack of reporting standards and the absence of agreement regarding the over-arching purpose of CSR reports and their assurance.

Research limitations/implications

Going forward, researchers should consider the multifaceted role management can play in CSR reporting and assurance, rather than treating managerial capture and management-as-champion as mutually exclusive. Future research could also examine how standards may balance desired comparability with flexibility in CSR reporting.

Practical implications

The study will interest report users who may assume that a seemingly supportive management would not play a restrictive role in the reporting and assurance processes. Reporters and assurors will benefit from reading the perspectives provided by professionals engaged in similar work, including the challenges they face, such as the consequences resulting from the lack of standards for CSR reporting and assurance.

Originality/value

The study is the first to provide a behind-the-scenes view of the report–assuror dyad by interviewing both the reporting firm and the assurance team engaged on the same CSR report.

Details

Journal of Applied Accounting Research, vol. 20 no. 4
Type: Research Article
ISSN: 0967-5426

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Article

L. Emily Hickman

This paper aims to investigate the motivations behind the publication of corporate social responsibility (CSR) reports, and particularly the effect of information…

Abstract

Purpose

This paper aims to investigate the motivations behind the publication of corporate social responsibility (CSR) reports, and particularly the effect of information asymmetry between firms and their owners.

Design/methodology/approach

A natural experiment contrasting the CSR reporting of private vs public firms is used to test whether the degree of information asymmetry is a significant factor in the decision to publish CSR reports. Using a hand-collected sample of the 239 largest US private companies matched with publicly-traded firms, the effect of these inherently different information environments on CSR reporting is tested through logistic regression. Factors suggested by stakeholder and legitimacy theories are tested for their differential impact on private vs public firms’ decisions to publish a CSR report.

Findings

Results indicate that private firms are less likely to publish a CSR report than similar public firms. Public firms also follow Global Reporting Initiative guidelines more frequently, consistent with signaling report quality to dispersed investors. A subsample of private companies facing greater information asymmetry is found to be similar to public firms in their reporting behavior, reinforcing the link between information asymmetry and CSR disclosure. Further analysis suggests that non-owner stakeholders play an important role in private companies’ CSR reporting decisions.

Practical implications

In addition to accounting and governance scholars, the findings should interest private firm managers preparing for an initial public offering (IPO), as the evidence suggests that CSR reporting is used to communicate information to dispersed investors. The insight into reporting motivations should be useful to accountants engaged in CSR consultation and assurance.

Social implications

With the growing attention paid to the CSR performance of firms, demonstrated by the growth in socially responsible investing, the study provides evidence that effective communication of CSR information to investors may play a key role in CSR-engaged firms’ disclosure strategies.

Originality/value

To the best of the author’s knowledge, this study is the first to analyze the CSR reporting decisions of a large sample of publicly-traded and privately-held firms. The results add to our understanding of what motivates firms to publish CSR reports, highlighting the importance of information asymmetry between the firm and its owners.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 1
Type: Research Article
ISSN: 2040-8021

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Article

Joanna Krasodomska, Jan Michalak and Katarzyna Świetla

This paper aims to explore accountants’ views on mandatory corporate social responsibility (CSR) reporting. It focuses on three main factors underpinning their…

Abstract

Purpose

This paper aims to explore accountants’ views on mandatory corporate social responsibility (CSR) reporting. It focuses on three main factors underpinning their understanding and attitude towards non-financial disclosures: general understanding of the concept, gender and work experience.

Design/methodology/approach

The study uses social identity theory as the theoretical framework. The findings are based on a survey conducted among 73 accountants in 2018. The questionnaire consisted of 86 questions divided into 9 main areas. The Mann–Whitney U test was used to determine if there are any significant differences between the accountants’ attitudes towards non-financial disclosures.

Findings

Study results suggest that the general knowledge of CSR reporting among accounting specialists is insufficient. The attitude towards mandatory CSR disclosures significantly differs between accountants who participated in training related to non-financial reporting and those who did not. Contrary to expectations, there were no significant differences in responses either between female and male accountants or between accountants at the beginning of their career path (with experience shorter than five years) and the more experienced ones. The paper contributes to social theory studies as it refers to the problem of the influence of professional associations, governments and big accounting firms on the transformation of accountants’ social identity. It also discusses the relations between the characteristics influencing personal identity and social identity of accountants in shaping their attitude towards mandatory non-financial disclosures.

Practical implications

The findings could be of interest to the higher education and professional certification institutions which should consider bringing accounting curricula more closely to the realities of the current business environment.

Originality/value

The study contributes to the body of literature mainly because it investigates a diversified sample of accountants in a relatively unexplored institutional setting. It may also serve as a starting point for research that more broadly explores accountants’ engagement in non-financial disclosures on CSR.

Details

Meditari Accountancy Research, vol. 28 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

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Article

Amer Al Fadli, John Sands, Gregory Jones, Claire Beattie and Domenico Pensiero

This study aims to investigate the influence of board independence on the level of corporate social responsibility (CSR) reporting in Jordan over time. The paper also…

Abstract

Purpose

This study aims to investigate the influence of board independence on the level of corporate social responsibility (CSR) reporting in Jordan over time. The paper also compares this level of influence between the pre- and post-issuance of the Jordanian corporate governance code (JCGC) in 2009.

Design/methodology/approach

Longitudinal data (panel data) from all non-financial listed companies on the Amman stock exchange for the period 2006-2015 was collected and analysed. The content analysis method was used to assess the CSR reporting evident in the annual reports. An ordinary least square regression was used to investigate the relationship between board independence and the level of CSR reporting.

Findings

The results revealed that board independence has a positive and significant influence on the level of CSR reporting. This influence became significantly stronger post the issuance of the corporate governance code in Jordan. The findings suggest that the presence of independent directors on the board encourages companies to report additional CSR information as one of the legitimation strategies to manage the expectations of stakeholder groups.

Research limitations/implications

This study provides motivation for regulators and companies to continue to improve board independence effectiveness.

Practical implications

The study supported evidence from prior studies, conducted the developed countries, that legitimacy theory is also applicable in Jordanian companies, which is a developing country. This study contributes to the debate and findings of the literature about governance and CSR reporting, specifically in the Middle East, as well as the potential of future studies in developing countries using a legitimacy theory as the basis for their investigations and motivation. This study provides evidence to motivate regulators and companies to improve, further, board independence effectiveness.

Originality/value

This empirical study has explored the potential influence of board independence on the level of CSR reporting in Jordan for JCGC pre- and post-issuance, which has not been examined previously and the findings for future studies in the Middle East region and other developing countries.

Details

International Journal of Law and Management, vol. 62 no. 2
Type: Research Article
ISSN: 1754-243X

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Article

Andrea Pérez and Carlos Lopez-Gutierrez

Supported by the principles of the legitimacy theory, the purpose of this paper is to explore the relationship that exists between the information quality of the corporate…

Abstract

Purpose

Supported by the principles of the legitimacy theory, the purpose of this paper is to explore the relationship that exists between the information quality of the corporate social responsibility (CSR) reporting provided by the most liquid companies operating in the Spanish Stock Market and their corporate reputation.

Design/methodology/approach

Three regression models are tested with panel data collected for a sample of the 35 most liquid companies operating in the Spanish Stock Market between 2004 and 2014.

Findings

The findings show that two axes of information quality (i.e. content and management systems) should be necessarily controlled by companies in order to improve their corporate reputation through their CSR reporting. The content axis refers to the compliance of CSR reports with the provision of qualitative, quantitative, and evaluative information concerning the impacts of the CSR of the company on society and the environment. The management systems axis refers to the compliance of CSR reports with the disclosure of details about the policies, plans, and actions that companies implement to assure an effective management of CSR initiatives.

Originality/value

Previous literature exploring the relationship between corporate reporting and reputation has frequently focused on either the impact of the quantity of financial and CSR information reported by companies and the role of information quality, but only in reference to a number of specific themes (environment, customers) and not to the full range of information covered by CSR reports. The authors of this paper extend on previous academic literature by empirically evaluating the relationship between two dimensions of the information quality of CSR reporting (content and management systems) and the corporate reputation of companies operating in the Spanish Stock Market.

Objetivo

Basándose en la teoría de la legitimidad, los autores de este trabajo exploran la relación que existe entre la calidad de la información contenida en las memorias de responsabilidad social corporativa (RSC) de las principales empresas cotizadas en la bolsa española y su reputación corporativa.

Diseño/metodología/enfoque

Se testean tres modelos de regresión con un panel de datos recopilados entre 2004 y 2014 para una muestra de las 35 empresas más sólidas de la bolsa española.

Resultados

Los resultados muestran que los dos ejes principales de la calidad de la información (es decir, contenido y sistemas de gestión) deben ser necesariamente controlados por las empresas con el fin de mejorar su reputación corporativa a través de sus memorias de RSC. El eje de contenido se refiere al cumplimiento de las memorias de RSC con el suministro de información cualitativa, cuantitativa y de evaluación en relación con los impactos de la RSC de la empresa en la sociedad y el medio ambiente. El eje de los sistemas de gestión se refiere al cumplimiento de las memorias de RSC con la divulgación de información acerca de las políticas, planes y acciones que las empresas implementan para asegurar una gestión eficaz de las iniciativas de RSC.

Originalidad/valor

La literatura previa que ha explorado la relación entre la información corporativa y la reputación se ha centrado con frecuencia en (1) el impacto de la cantidad de información financiera y de RSC que generan las empresas o (2) el papel de la calidad de la información, pero sólo en referencia a una serie de temas concretos (principalmente medio ambiente y clientes) y no a toda la gama de información cubierta por las memorias de RSC. Los autores de este trabajo amplían esta línea de investigación mediante la evaluación empírica de la relación entre dos dimensiones de la calidad de la información de las memorias de RSC (contenido y sistemas de gestión) y la reputación corporativa de las empresas que operan en la bolsa española.

Details

Academia Revista Latinoamericana de Administración, vol. 30 no. 1
Type: Research Article
ISSN: 1012-8255

Keywords

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