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1 – 10 of over 10000Zhongtian Li, Shamima Haque and Larelle (Ellie) Chapple
The purpose of this paper is to analyse how an influential supplier of electronics manufacturing services (i.e. Foxconn) discloses its labour practices.
Abstract
Purpose
The purpose of this paper is to analyse how an influential supplier of electronics manufacturing services (i.e. Foxconn) discloses its labour practices.
Design/methodology/approach
The analysis is conducted through the theoretical lens of legitimacy and impression management. This particular firm is selected as it provides a rich case on labour practice disclosures in a setting where significant labour malpractice incidents occurred from 2009 to 2011. The sample period covers 12 years of the firm's labour practice disclosures (2008–2019) to match with publicly available information that is used to construct expert comparative accounts on the disclosures. The authors corroborate the comparative accounts with sociological studies and responsibility reports from the major customer (i.e. Apple).
Findings
The authors found that the disclosures become more detailed over successive years. Occupational health and safety issues are predominantly reported, followed by issues relating to vocational guidance and training and then employment policy. Regarding impression management strategies, defensive strategies embedded in the disclosures are rarely detected and assertive strategies are persistently used from 2008 to 2019 to maintain legitimacy. The comparative accounts show the persistent use of one defensive strategy (i.e. omission) to maintain and regain legitimacy. In other words, as an economic strategy, material labour practice issues are persistently omitted in the disclosures. The incidents discernibly affect how Foxconn discloses labour practices.
Originality/value
The authors’ study contributes to the limited extant research on suppliers' labour practice disclosures from the perspective of legitimacy theory and impression management. The results will be of great interest to researchers, investors, assurers and other stakeholders.
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Fitra Roman Cahaya, Stacey Porter, Greg Tower and Alistair Brown
– This paper aims to focus on corporate social responsibility and workplace well-being by examining Indonesian Stock Exchange (IDX)-listed companies’ labour disclosures.
Abstract
Purpose
This paper aims to focus on corporate social responsibility and workplace well-being by examining Indonesian Stock Exchange (IDX)-listed companies’ labour disclosures.
Design/methodology/approach
Year-ending 2007 and 2010 annual report disclosures of 31 IDX-listed companies are analysed. The widely acknowledged Global Reporting Initiative (GRI) guidelines are used as the disclosure index checklist.
Findings
The results reveal that the overall labour disclosure level increases from 21.84 per cent in 2007 to 30.52 per cent in 2010. The levels of four of the five specific labour disclosures also increase with employment being the exception. The results further show that the Indonesian Government does not influence the increase in the levels of the overall labour disclosure or the four categories showing increased disclosure but, surprisingly, does significantly affect the decrease in the level of the employment category.
Research limitations/implications
It is implied that the government is at best ambiguous given that, on one side, the government regulates all corporate social responsibility (CSR) activities and reporting but appears to coercively pressure companies to hide employment-specific issues.
Practical implications
It is implied that Indonesian companies need to have “strong and influential” independent commissioners on the boards to counter any possible pressures from the government resulting in lower disclosure levels.
Originality/value
This paper provides insights into the “journey” of labour-related CSR disclosure practices in Indonesia and contributes to the literature by testing one specific variant of isomorphic institutional theory, namely, coercive isomorphism.
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Faisal Faisal, Greg Tower and Rusmin Rusmin
The purpose of this study is to explore explanation factors regarding labor communication practices by many of the world's large companies.
Abstract
Purpose
The purpose of this study is to explore explanation factors regarding labor communication practices by many of the world's large companies.
Design/methodology/approach
The data collection focuses on the 2009 fiscal year sourced from 460 highly visible public companies in 57 separate countries. A total of 14 Global Reporting Initiative (GRI) items are used as the benchmark of labor disclosure checklist.
Findings
The authors' results provide evidence that the overall level of labor‐style communication is 66.4 percent. Companies in emerging market jurisdictions have the highest labor disclosure communication. Employment information is the most frequently disclosed set of items. Lesser communication is noted for training and education, and diversity and equal opportunity issues. Statistical analysis indicates that political visibility, jurisdictional, creditor pressure, and corporate governance variables are directly related to labor communication.
Research limitations/implications
This study assumes that the 14 items used as the checklist benchmark from GRI (2006) are voluntary in each country. Results suggest that combination of legitimacy theory and stakeholder theory are relevant in explaining global context of labor communication.
Originality/value
A broader international survey of labor practices using the specific guidelines of the globally respected Global Reporting Initiative (GRI) has not yet been conducted. This study contributes insights for a better understanding of labor communication practices among three jurisdictional business systems.
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Fitra Roman Cahaya, Stacey A. Porter, Greg Tower and Alistair Brown
This study aims to advance explanations of the communication level of labor disclosures of Indonesian listed companies.
Abstract
Purpose
This study aims to advance explanations of the communication level of labor disclosures of Indonesian listed companies.
Design/methodology/approach
Year‐ending 2007 Annual report disclosures of 223 Indonesia Stock Exchange (IDX) listed companies are analyzed. The labor practices and decent work disclosure component of the 2006 Global Reporting Initiative (GRI) guidelines are used as the benchmark disclosure index checklist.
Findings
The results show a low level of voluntary disclosure (17.7 per cent). The highest level of communication is for issues related to skills management and lifelong learning programs for employees. Very few companies disclosed information about health and safety committee and agreements, and salary of men to women. Statistical analysis reveals that government ownership and international operations are positively significant predictors of “labour” communication. Isomorphic institutional theory partially explains the variability of these disclosures. Bigger companies also provide more labor practices and decent work disclosures.
Research limitations/implications
The main implications of the findings are that Indonesian companies are not clearly communicating labor responsibility issues as a key precondition of corporate social responsibility (CSR). They may be obfuscating some information to protect their image and reputation.
Originality/value
This paper provides insights into the disclosure practices of labor issues, a specific social disclosure theme which is rarely examined in prior literature, under the umbrella of institutional theory. The research also includes “goal factor” to be tested as one of the independent variables.
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This paper aims to investigate changes in corporate disclosures of labour‐related costs in financial statements arising from a change in the accounting regime from generally…
Abstract
Purpose
This paper aims to investigate changes in corporate disclosures of labour‐related costs in financial statements arising from a change in the accounting regime from generally accepted accounting principles (GAAPs) to international financial reporting standards (IFRSs) in Australia.
Design/methodology/approach
An archival empirical approach is taken. Data are sampled for 160 listed companies in Australia over seven years covering Australian GAAPs (2003‐2005) and Australian IFRSs (2006‐2009) periods. To measure disclosures, a classification and count is made of line items for labour‐related costs found on the face of and in the notes to financial statements. These disclosures are analysed against firm‐specific characteristics and industry categories.
Findings
Results reveal companies disclosing “total labour costs” rose from about 60‐85 per cent, and the discretionary disaggregation of “total labour costs” became more prevalent. Companies providing disaggregated information in the post‐IFRSs period are characterized by lower total assets, lower sales and lower labour costs. Their return on equity and labour intensity are not found to be differentiating characteristics. Reasons for these phenomena are addressed.
Originality/value
Previous studies have not analysed the effect of IFRSs adoption on disclosures of labour‐related information. This study provides new evidence about the types of firms that have responded to IFRSs with new or enhanced labour‐related financial disclosures. It points to new opportunities for research and financial analysis from the enhanced availability of corporate‐level labour cost data.
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This research paper examines the information content and managerial incentives for labour cost voluntary disclosures for a sample of United States publicly traded companies. We…
Abstract
This research paper examines the information content and managerial incentives for labour cost voluntary disclosures for a sample of United States publicly traded companies. We focus on labour productivity and managerial efficiency in labour usage and argue that these human capital indicators could provide valuable information to capital market participants seeking human resource‐type of performance measures and signals. Labour productivity and efficiency indicators are estimated following a production function approach and are included in logistic regressions to help explain and predict labour cost voluntary disclosure decisions. We find that labour productivity and managerial efficiency in labour use indicators are generally different between disclosing and non‐disclosing firms, and that proprietary information costs and political cost proxies are significantly related to labour costs voluntary disclosure, consistent with previous literature. These empirical results corroborate the ‘proprietary information’ hypothesis of voluntary disclosure where the strategic costs of disclosure outweigh the signaling benefit from disclosing human capital information.
Building on an integration of strategic human resource capital management and human capital disclosure literature streams, this paper explores the associations between human…
Abstract
Purpose
Building on an integration of strategic human resource capital management and human capital disclosure literature streams, this paper explores the associations between human resource performance and human resource disclosure in the financial services sector.
Design/methodology/approach
Using content analysis and panel regression methods, the paper examines the extent, nature, and information content of human capital disclosures in the financial services sectors in North America during the global financial crisis period.
Findings
Labor costs and marginal labor productivity are significantly associated with human resource disclosure and the latter is significantly related to both financial (explicit) and non-financial (implicit or relational) components of the employment relationship. Results show inverted effects between the US and Canadian samples. The findings support a contingency view or “best-fit” approach to human resource capital management.
Practical implications
Differences in labor market structures and human capital attributes could have significant impacts on human capital disclosure strategies. More transparent and detailed disclosures regarding human resource capital management may provide useful and relevant information for investors and stakeholders in general.
Originality/value
The study provides insights into how labor market structures and human capital attributes jointly affect the extent and nature of corporate disclosures with regards to rents distribution and relational governance between employers and employees.
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Katherine Leanne Christ, Kathyayini Kathy Rao and Roger Leonard Burritt
Given the impending introduction of legislation requiring large Australian listed companies to make supply chain disclosures about modern slavery, the paper aims to reveal current…
Abstract
Purpose
Given the impending introduction of legislation requiring large Australian listed companies to make supply chain disclosures about modern slavery, the paper aims to reveal current voluntary practice. The purpose of this paper is to provide a benchmark for assessing the current engagement of large companies with modern slavery in Australia.
Design/methodology/approach
Institutional theory provides the foundation for assessing current voluntary practice in relation to modern slavery disclosures by large Australian listed companies. Content analysis is used to identify quantity and quality of modern slavery disclosures of the top 100 companies listed on the Australian Stock Exchange. The contents of annual and standalone reports available on websites, as well as other online disclosures, are examined using terms associated with modern slavery identified from the literature.
Findings
Evidence gathered about modern slavery disclosures by ASX 100 companies shows information in annual and standalone reports reveal far less than other disclosures on company websites. Overall, the volume and quality of disclosures are low and, where made, narrative. A wide range of themes on modern slavery are disclosed with bribery and corruption and human rights issues dominant. Although currently in line with institutional theory, as there appear to be mimetic processes encouraging disclosure, results support the idea that legislation is needed to encourage further engagement.
Research limitations/implications
The paper provides a baseline of understanding about the volume and quality of modern slavery disclosures as a foundation for future research into the practices of Australian companies prior to the signalled introduction of legislation mandating reporting. It also identifies potential lines of research. The sample only examines large Australian listed companies which restricts generalisation from the results.
Originality/value
This is the first academic research paper to examine quantity and quality of modern slavery disclosures of large Australian companies. Results add support for the introduction of legislation by government.
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Sangwan Kim, KoEun Park, Joshua Rosett and Yong-Chul Shin
The purpose of this paper is to investigate whether sell-side equity analysts use labor cost information when forming expectations of future earnings. The availability of…
Abstract
Purpose
The purpose of this paper is to investigate whether sell-side equity analysts use labor cost information when forming expectations of future earnings. The availability of disaggregated earnings components will benefit financial statement users to the extent that the additional information released by a firm is useful to infer differential persistence of disaggregated earnings components.
Design/methodology/approach
This paper employs ordinary least squares, logit, and two-stage Heckman (1979) regressions which test whether analysts incorporate labor cost information into their earnings forecasts after controlling for a managerial self-selection to disclose labor costs, and further test whether a firm’s decision to voluntarily disclose labor costs improves analyst forecast accuracy.
Findings
This research finds that analysts incorporate labor cost information into their earnings forecasts after controlling for other earnings components. More importantly, this research shows that voluntary disclosure of labor cost information is positively associated with analyst forecast accuracy. Additional tests show that the benefit of voluntary labor cost information is more pronounced for firms with high information uncertainty and for analysts with less firm-specific experience and analysts affiliated with small brokerage houses.
Originality/value
This paper contributes to the literatures on the effect of labor cost on investors’ behavior and on analyst-specific factors in explaining analyst ability to predict future earnings.
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Kevin Baird, Amy Tung and April Moses
This study examines the association between management control systems (MCSs), specifically the interactive and diagnostic use of controls, with the corporate social…
Abstract
This study examines the association between management control systems (MCSs), specifically the interactive and diagnostic use of controls, with the corporate social responsibility (CSR) disclosure-action portrayal gap (i.e. the disparity in employees’ perception of their organisation’s emphasis on CSR disclosures relative to CSR actions) and the subsequent impact on employees’ perceptions of organisational performance, both operational performance and corporate social performance. Data were collected using a survey of US lower-level managers, with the data obtained from 209 respondents and analysed using structural equation modelling (SEM). The results reveal that the interactive and diagnostic use of controls both exhibit a significant negative association with the CSR disclosure-action portrayal gap, that is, the use of these controls reduces the gap. In addition, the various dimensions of the CSR disclosure-action portrayal gap exhibit a significant negative association with both operational and corporate social performance, that is, lower gap, higher performance. The study contributes to the CSR literature by providing the first empirical insight into employees’ perception of both CSR disclosures and actions, and hence, the CSR disclosure-action portrayal gap. In addition, the study contributes to the MCS and organisational performance literature by providing the initial empirical insight into the role of MCSs in mitigating the gap through enhancing the interactive and diagnostic use of controls, and the negative association between the gap and employees’ perceptions of organisational performance.
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