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The purpose of this paper is to empirically test legitimacy theory by comparing the corporate social responsibility (CSR) disclosures of tax aggressive corporations with those of non‐tax aggressive corporations in Australia.

A unique sample of 20 Australian corporations accused by the Australian Taxation Office of engaging in tax aggressive activities during the 2001‐2006 period was hand‐collected. These 20 tax aggressive corporations were then matched with 20 non‐tax aggressive corporations (based on industry classification, corporation size and time period). This process generated a choice‐based sample of 40 corporations for empirical analysis. Using content analysis techniques, financial accounting data were gathered from the Aspect‐Huntley database and CSR disclosures were individually measured for each corporation in the sample. Various statistical techniques were then used (e.g. paired sample statistics, Pearson correlation analysis and ordinary least squares regression analysis) to test legitimacy theory.

Overall, the empirical results consistently show a positive and statistically significant association between corporate tax aggressiveness and CSR disclosure, thereby confirming legitimacy theory in the context of corporate tax aggressiveness.

The paper provides empirical evidence in support of legitimacy theory as an explanation for why specific corporations disclose more CSR‐related information than others. Additionally, to the best of the authors' knowledge, the paper is one of the first to document an empirical association between corporate tax aggressiveness and CSR in the literature.

The purpose of this paper is to reflect upon the contributions made to the social and environmental accounting literature by papers that comprised a 2002 Special Issue of Accounting, Auditing and Accountability Journal (AAAJ) entitled social and environmental reporting and its role in maintaining or creating organisational legitimacy. This paper will also provide insights into the origins of legitimacy theory as used in the social and environmental accounting literature as well as providing reflections about the strengths, and shortcomings, of the theory. Suggestions are made with respect to the ongoing application, and development, of legitimacy theory.

As a commentary, this paper utilises a review of the social and environmental accounting and institutional literature across a number of decades to reveal insights about the development and use of legitimacy theory as a basis to explain social and environmental reporting practices. Citation data are also used to indicate the potential impact that the papers in the 2002 Special Issue had upon subsequent research.

This commentary shows that the 2002 Special Issue is the most highly cited issue in the history of AAAJ. It also shows that individually, some of the papers in the Special Issue represent some of the most highly cited papers in the social and environmental accounting literature. The commentary provides arguments to suggest that the development of legitimacy theory is in need of further refinement, and suggests a way in which this refinement might take place.

This paper is largely based on the opinions of one researcher, and the evidence presented in the paper is selected on the basis that it is deemed sufficient to support the opinions being projected. The paper also relies on citation data as an indicator of “impact”. The implication of the research is that it identifies a “way forward” for the development of theory applicable to the understanding of organisational social and environmental reporting practices.

The study provides evidence to show that the 2002 Special Issue was significant within the context of AAAJ, and also within the context of the evolution of the social and environmental accounting literature. The description of the history of the development of legitimacy theory, and of the theory’s subsequent application, provides a solid impetus for future refinements to the theory.

This paper serves as an introduction to this special issue of Accounting, Auditing & Accountability Journal; an issue which embraces themes associated with social and environmental reporting (SAR) and its role in maintaining or creating organisational legitimacy. In an effort to place this research in context the paper begins by making reference to contemporary trends occurring in social and environmental accounting research generally, and this is then followed by an overview of some of the many research questions which are currently being addressed in the area. Understanding motivations for disclosure is shown to be one of the issues attracting considerable research attention, and the desire to legitimise an organisation’s operations is in turn shown to be one of the many possible motivations. The role of legitimacy theory in explaining managers’ decisions is then discussed and it is emphasised that legitimacy theory, as it is currently used, must still be considered to be a relatively under‐developed theory of managerial behaviour. Nevertheless, it is argued that the theory provides useful insights. Finally, the paper indicates how the other papers in this issue of AAAJ contribute to the ongoing development of legitimacy theory in SAR research.

Before addressing these three issues, I provide some background on the key theoretical approaches to legitimacy employed in this volume: two legitimacy theories in social psychology and institutional theory in organizational analysis. Virtually every contributor draws upon at least one of these theories; several authors draw upon two of these theories, offering a way to bridge them and/or apply them to a substantive concern.

The purpose of this paper is to examine the voluntary social and environmental disclosures made in the annual reports of Rothmans Ltd between the years of 1955 and 1999. The first part of the paper focuses on defining legitimacy theory as it has been used in accounting research, extending the current model of legitimacy that predominates, and discussing the potential of a resource‐based approach to testing the theory.

A qualitative and quantitative approach to analysing annual report disclosures is presented, and this is one of the few studies to operationalise the variables under study as measures of resource flows.

The paper considers legitimacy theory in light of disclosures made by Rothmans. An initial analysis provides qualitative examples of expected attempts to legitimatise the corporation given the threat posed by the smoking and health debate. Further analysis conducted using a quantitative measure of resource flows controlled by one stakeholder group, contradicts those expected when compared with previous studies, and as a result of this an alternative conceptualisation of legitimacy theory is proposed.

The paper considers one company in one industry and provides evidence from limited stakeholders groups. The results have implications for further research on social and environmental reporting that use a legitimacy framework.

The paper provides one of the few studies to attempt to measure resource flows in order to proxy stakeholder influence on reporting. This therefore provides an alternative to the more common measures of legitimacy used in previous studies. These have predominantly been based on researcher judgement of the categorised text to determine whether they fit certain “legitimacy” criteria.

The purpose of this paper is to review the “state of the art” in research on police legitimacy. The authors consider two bodies of theory and empirical research on police legitimacy: one rooted in social psychology and concerned with individual attitudes, and the other based on organizational institutionalism. The authors contrast the theories, discuss the methods with which propositions have been examined, and take stock of the empirical evidence. The authors then turn to a direct comparison of the theories and their predictions.

Critical review and comparison of two bodies of literature.

Police legitimacy is a phenomenon that can be properly understood only when it is addressed at both individual and organizational levels. A large body of social psychological research on police legitimacy has been conducted at the individual level, though it has dwelled mainly on attitudes, and the empirical evidence on the relationships of attitudes to behavior is weak. A much smaller body of research on organizational legitimacy in policing has accumulated, and it appears to have promise for advancing our understanding of police legitimacy.

The understanding of police legitimacy can be deepened by the juxtaposition of these two bodies of theory and research.

The purpose of this paper is to examine whether the voluntary annual report disclosures, relating to conflict diamonds, for four of the largest diamond mining companies operating in South Africa can be explained through applying legitimacy theory and media agenda‐setting theory.

Applying legitimacy theory under the assumption of media agenda‐setting theory, the study draws a comparison between the volume of disclosure relating to conflict diamonds made in the annual reports of four of the largest diamond mining companies operating in South Africa and the volume of South African media publications addressing conflict diamonds.

The results of the study suggest that changes in the degree of media attention relating to the issue of conflict diamonds are largely mirrored by the annual report disclosure by one firm, but not by the other firms in the sample. Hence, legitimation motives lend support for only one of the four firms.

It should be noted that in relying upon legitimacy theory to examine variations in voluntary annual report disclosures regarding conflict diamonds, the study does not invalidate the likelihood that other theories, such as stakeholder theory or political economy theory, for example, may also hold explanatory power.

No prior research combining legitimacy theory and media agenda theory to explain voluntary disclosure of conflict diamonds by South African diamond mining companies could be found.

This chapter revisits and extends the multiple-source, multiple-object theory of legitimacy in organizations. It introduces the idea of legitimized regimes and uses it to extend the theory’s range beyond the usual focus on power and domination. The theory describes mechanisms that: (1) establish the legitimacy of new or contested regimes; and (2) facilitate the spread of legitimacy to structures and processes that lie outside organizational boundaries. The chapter uses current affirmative action debates to illustrate the mechanisms under study. The work concludes with a summary that includes discussion of prospects for research on extensions of the multiple-source, multiple-object theory.

The processes of legitimation and institutionalization are difficult to study because they are hard to measure. Instead, theories of legitimacy use its elements to explain various effects. We propose that these effects are due to the trust-building aspects of legitimation and institutionalization. If research can establish the trust-building nature of legitimation, then theoretical research programs in the area may progress more rapidly. Research on leadership in groups can be used to assess fundamental questions of legitimacy and trust because group leadership represents an interface between research on organizations and basic group processes. We describe an experimental setting to investigate legitimation, institutionalization, and trust.

The paper seeks to adopt an institutional view of legitimacy to examine how a sample of French companies reacted to the introduction of the “New Economic Regulations” in French law in 2001 requiring that publicly listed companies disclose environmental information.

The approach used in the paper is both quantitative and qualitative. A content analysis of environmental disclosure provided in annual reports, environmental reports and web sites by 26 French companies listed in the CAC 40 is performed throughout the period 2001-2011.

The findings of this study show a significant and enduring improvement in the quality and quantity of environmental disclosure from 2001 to 2011. Even in the absence of penalties for non-compliance, the NRE law stimulated a stark and positive lasting change in the way that French companies account for their environmental information. These findings are consistent with the institutional view of legitimacy theory whereby legislation provides corporate managers with a representation of relevant audiences' perceptions about social and environmental reporting, prompting them to comply with the law to ensure organizational legitimacy.

Social and environmental reporting studies generally adopt a strategic view of legitimacy to examine how organizations use social and environmental reporting to respond strategically to legitimacy threats. This study provides early empirical evidence about the relevance of institutional legitimacy theory in explaining environmental reporting.