Annual reports are an important element in the genre of corporate public discourse. The reporting practices mandated by the Securities and Exchange Commission for all publicly traded corporations are intended to render the annual reports a legitimate and trustworthy medium through which management communicates information related to the financial performance of the firm. The following discussion represents an inaugural attempt to investigate the ethical characteristics of the discourse found in corporate annual reports (...) using Habermas' principles of communicative action. In preparing the Management's Discussion and Analysis (MD&A) portion of the report, managers are charged with providing narrative information for investors and other interested third parties relevant to assessing the firm's financial condition. Previous rhetorical studies of the narrative portions of annual reports argue that they serve as means for both legitimate and distorted communication. We investigate this communication medium through the lens of Habermas' norms for communicative action, which require communicators to be comprehensible, truthful, sincere, and legitimate. The study represents an initial attempt to operationalization Habermas' principles of communicative action and to employ a methodology that facilitates their application to research within a business context. From one perspective, consistent with agency theory as specified by neoclassical economics, it would seem that firms anticipating worse-than-expected financial performance would be less likely to exhibit the Habermasian principles necessary for undistorted communication because they would attempt to strategically influence the message being communicated about the firm's financial position. Instead, employing rhetorical analysis software, Diction 5.0, we found that firms expecting both good and bad earnings surprises exhibited a higher level of communicative action than a composite average firm. Although preliminary in nature, our findings suggest that firms anticipating large earnings surprises, either high or low, use the narrative portion of the annual report as a vehicle through which to communicate information about managements' veracity and trustworthiness as well as the firm's financial position. (shrink)

Anchored in stakeholder theory, the study aimed at examining the extent of voluntary human capital disclosures in annual reports of top 20 Bangladeshi and Indian listed companies. In addition to qualitative content analysis of the annual reports for the year 2010–2011, this study also conducted a series of in-depth interviews with a range of stakeholders of the companies of both the countries to understand their views on voluntary HC disclosures in corporate annual reports. (...) It was found that the level of voluntary HC disclosures was very low in case of the companies of both the countries. Moreover, it was observed that HC disclosures of companies mostly composed of positive information. From the views of stakeholders, it was evident that stakeholders unanimously recognized the necessity of credible HC disclosures in corporate annual reports. The HC disclosure index framed in this study may be useful in developing a South Asian model of corporate HC disclosures. This study contributes to the existing literature on HC disclosures where there has been a distinct lack of engagement-based research works. (shrink)

Based on the texts of ‘Management Discussion and Analysis on Financial Status and Business’ collected from 118 American corporate annual reports, this study investigated how the professional discourse is realized from the dimensions of text, genre, professional practice and professional culture, according to the framework of the Critical Genre Analysis theory. It was found that In the text dimension, lexicon features regarding vocabulary volume, vocabulary highlighting, readability and sentiment are unique to MD&As; the genre of MD&As corresponds (...) to a rhetorical structure of 3 moves and 10 steps; the professional practice of MD&As is represented by three types of interdiscursivity, that is, shifting, mixing and embedding; the professional culture of MD&As is embodied through identity enculturation, human-oriented value, cooperation awareness and self-serving manner. The results of this study help to better understand the realization of professional discourse and expand the application of CGA in professional practice. The findings presented herein are expected to enhance interdisciplinary research that relates language with corporate performance. (shrink)

Combining the frameworks of multi-dimensional analysis and rhetorical structure theory, this study examines the linguistic co-occurrence patterns in the discourse of corporate annual reports and interprets their underlying functional dimensions. Our corpus consists of texts of corporate 10K reports from firms listed on New York Stock Exchange. Five functional dimensions are quantitatively extracted and qualitatively interpreted: expression of direct persuasion; expression of impersonal stance; subjective versus objective positioning; integrative expression of stance versus fragmented expression; and (...) expression of reliability. All these dimensions contribute to the communicative function of persuasion. The analysis of the rhetorical structures of excerpts with high concentrations of co-occurring linguistic features on each dimension further indicates the communicative strategy of persuasion. The proposed MD model is then applied to analyze the effect of firm performance on the linguistic variation in CAR discourse. We found that firm performance can significantly affect the linguistic variation in CAR discourse. CAR discourse from firms with good performance is more reliable. The result reveals managements’ use of concealment strategy in impression management. This study has implications for MD analysis, business discourse analysis, language pedagogy and accounting research. (shrink)

Our study analyses the nature, quality and extent of human resource disclosures of UK Financial Times Stock Exchange 100 firms by relying on a novel disclosure index measuring the depth and breadth of disclosures. Contextually, we focus on the 5-year period following the then Labour government’s attempts to encourage firms to formally report on their human resource management practices and to foster deeper employer–employee engagement. First, we evaluate the degree to which companies report comprehensively on a number of HRD items (...) that we classify as “procedural” or “sustainable.” Second, we hypothesise that a company’s employee relation ideology is positively associated with HRD. Our results indicate that: whilst there has been an increase in the breadth of HRD in terms of procedural and sustainable items being disclosed, the evolution towards a more comprehensive and in-depth form of HRD remains rather limited; and there is a positive association between a company’s employee relation ideology and the level of HRD. Theoretically, we conceive of HRD both as a reflection of an organisation’s orientation towards a key stakeholder and a legitimacy seeking exercise at a time of changing societal conditions. We contribute to the scant literature on the extent and determinants of HRD since prior research tends to subsume employee-related disclosures within the broader concept of social, ethical or intellectual capital disclosures. We also propose a disclosure checklist to underpin future HRD research. (shrink)

This paper explores by means of content analysis the extent to which the Finnish biggest companies have adapted socially responsible reporting practices. The research focuses on Human Resource (HR) reporting and covers corporate annual reports. The criteria has been set on the basis of the analysis of the documents published at the European level in the context of corporate social responsibility (CSR), paying special attention to the European Council appeal on CSR in March 2000. As CSR (...) is a relatively new concept in Finland, the paper also contributes to the discussion on interface between HR reporting (especially as based on measurements such as Human Resource Accounting and Intellectual Capital schools) and corporate social reporting practices. The results of the content analysis indicate that social reporting practices are still at an early stage of development in Finland. The most reported theme was ‘training and staff development’. A positive sign was that the majority also disclosed themes ‘participation and staff involvement’ and ‘employee health and well-being’. Furthermore, nearly one-third made references to their work atmosphere or job satisfaction survey. However, disclosures lacked overall consistency and comparability with each other and especially quantitative indicators were disclosed by few. Further concern was lack of information related to the theme equal opportunities and going beyond a sheer disclosure of age or gender structure. The other issues rarely disclosed were those related to employee work–life balance and integration of disadvantaged groups in the labour markets. (shrink)

Islamic Banks (IBs) are considered as having ethical identity, since the foundation of their business philosophy is closely tied to religion. In this article, we explore whether any discrepancy exists between the communicated (based on information disclosed in the annual reports) and ideal (disclosure of information deemed vital based on the Islamic ethical business framework) ethical identities and we measure this by what we have termed the Ethical Identity Index (EII). Our longitudinal survey results over a 3-year period (...) indicate the overall mean EII of only one IB out of seven surveyed to be above average. The remaining six IBs suffer from disparity between the communicated and ideal ethical identities. We further found the largest incongruence to be related to four dimensions: commitments to society; disclosure of corporate vision and mission; contribution to and management of zakah, charity and benevolent loans; and information regarding top management. The results have important implications for communication management if IBs are to enhance their image and reputation in society as well as to remain competitive. (shrink)

The purpose of this paper is to explore corporate perspectives on the development and use of sustainability reports. Interviews with experts from 35 Canadian corporations were conducted. The research showed that the content of the reports was determined by following standards, conducting an internal evaluation, and other methods. Five corporations were found to develop fully integrated reports, while another 15 included some sustainability aspects in their annual reports. The extent of external stakeholder involvement in (...) the development of the report varied widely, but the majority of the corporations considered stakeholder input. Data collection was handled by a number of different individuals and groups, with sustainability departments often taking a lead role. Twenty-five corporations relied exclusively on internal personnel to write the report, with the remaining corporations using a combination of internal and external writers. A number of key challenges in developing sustainability reports were identified, including timelines, data collection, selecting content, and striking an appropriate balance in reporting. The reports were used internally in a number of different ways, including enhancing employee awareness and engagement and as an internal reference tool. A number of potential future uses of sustainability reports were also mentioned, such as improving the ability to track real-time performance. (shrink)

This paper explores the level of corporate social responsibility contributions disclosed by central public sector enterprises in India. This paper analyses the nature and quality of CSR disclosures made by CPSEs listed in India following the issue of CSR guidelines by the Department of Public Enterprises for CPSEs in March 2010. The purpose of the study is to investigate the impact of CSR guidelines on the reporting practices of the CPSEs. A content analysis of annual reports across (...) seven themes shows that Human Resources and Community Development are the prime focus areas of CSR disclosures, whereas Carbon and Greenhouse Gas emissions are the least reported activity. The disclosures across all CSR themes are primarily narrative rather than quantitative or in monetary terms. The findings of the study may help policy makers in India to assess practices and devise detailed and specific CSRD requirements, rather than the current general mandatory requirements, to enhance the performance and quality of CSRDs by the CPSEs. (shrink)

This book is compiled based on the research methodology and technical approach applied in the Blue Book of Corporate Social Responsibility. It consists of five parts: Summary, index, Industry, Case Studies, and Appendices. The index evaluates Chinese enterprises annually on their performance in CSR management and the level of information disclosure by assessing four different aspects: responsibility management, economic responsibilities, social responsibilities and environmental responsibilities. Moreover, it identifies and analyzes phase-specific characteristics of CSR development in China in the hope (...) of providing references for further studies on Chinese CSR. (shrink)

ABSTRACT Corporate Social Responsibility denotes a movement away from shareholder theories of the corporation, and refers to a set of practices designed to have an economic, environmental, and social impact. Public companies report on their CSR practices annually in the form of multimodal reports which are made available on the companies’ websites, and are typically read by investors who seek standardisation across this genre. Thus, most companies across the globe follow the Global Reporting Initiative framework for reporting, a (...) framework developed within the Global North. The dominance of the Global North in CSR practices is also evident in the academic literature – while applied linguists have gone some way in highlighting the generic, interpersonal, and ideational features of reports, such studies have predominantly focused on multinational corporations. There is, comparatively, very little literature on the CSR practices and discourses circulating in the Global South or former colonial contexts and because of this we have limited insight into how companies operating in these contexts discursively represent themselves, their employees and their suppliers within the same context. To address this shortcoming, this study draws on analytical approaches developed within Critical Discourse Analysis coupled with postcolonial theory in order to comment on the ideational features of the four most recent CSR reports of one South African company. (shrink)

The globalization movement in recent decades has meant rapid growth in trade, financial transactions, and cross-country ownership of economic assets. In this article, we examine how the globalization of national business systems has influenced the framing of corporate social responsibility (CSR). This is done using text analysis of CEO letters appearing in the annual reports of 15 major corporations in Sweden during a period of transformational change. The results show that the discourse about CSR in the (...) class='Hi'>annual reports has changed from a national and communitarian view of social responsibility (cf. a negotiated view of CSR) toward an international and individualistic view of social responsibility (cf. a self-regulating view of CSR). The article contributes theoretically (1) by adding a national–global dimension to previous conceptualizations of CSR and (2) by showing that the rise of CSR discourse and activities in the last 10 years does not have to imply an increased commitment and interest in corporate responsibility per se, only that there are increased societal expectations that corporations should develop the capability to act more independently as moral agents. (shrink)

This article investigates how companies make sense of CSR. It is based on an explorative comparative case study of 18 companies in the Netherlands using background information, interviews and annual reports. Initially, the sensemaking process of CSR is guided and coordinated by change agents who are specifically appointed to explore the implementation of CSR in their company. These change agents initiate the CSR process within their own organisations. The meaning they develop stems from their personal and organisational values (...) and frames of reference. By attuning the vocabulary of CSR to the language of their colleagues, they aim to gain support for this undertaking in their organisation. This sensemaking procedure can be divided into pragmatic, external, procedural, policy‐oriented and value‐driven processes. The capability of an organisation to embed CSR is the result of trial and error, personal preferences and the use of language by the change agent that fits the (dynamic) situation at hand. Thus, each organisation needs a tailor‐made approach to implement CSR successfully. (shrink)

This article examines corporate social disclosures (CSD) in an African developing economy (Mauritius) as provided in the annual reports of listed companies from 2004 to 2007. Informed by the country’s social, political and economic context and legitimacy theory, we hypothesise that the extent and variety of CSD themes (social, ethics, environment and health and safety) will be enhanced post-2004 and will be influenced by profitability, size, leverage and industry affiliation. We find a significant increase in the volume (...) and variety of CSD, although information in relation to social activities remains the most prominent form of disclosure. This is in contrast to previous studies which reported on the primacy of employee disclosures in developing countries. Using a pooled regression analysis, we also observe that size does explain variations in overall CSD and social disclosures, whilst leverage is positively related to changes in environmental and health and safety disclosures. There is no profitability relationship, and the effects of industry affiliation on CSD are non-significant or contrary to expectations. Overall, we assert that legitimacy, as a strategic and managerially driven approach favouring symbolic actions, is the prevailing motivation underlying the progression of CSD in Mauritius. (shrink)

This paper reports on comparative research on how textual representations of issues related to corporate social responsibility (CSR) in corporate annual reports from Sweden, Canada and the Netherlands have changed over time. The results show a substantial increase on a number of topics that can be linked to the general CSR-discourse in the 2001 sample in comparison to the 1991 and 1981 samples. The rise in the CSR-discourse appears to be related to a drop in (...) other discourses related to issues of social responsibility regarding the social, economic and political development of a company’s native country. (shrink)

Given the increasing importance attached to both corporate social responsibility (CSR) and corporate governance, this study investigates the association between these two complimentary mechanisms used by companies to enhance relations with stakeholders. Consistent with both legitimacy and stakeholder theory and controlling for industry profile, firm size, stockholder power/dispersion, creditor power/leverage, and economic performance, our analysis of the annual reports for a sample of 222 listed companies suggests that firms providing more CSR information: have better corporate (...) governance ratings; are larger; belong to higher profile industries; and are more highly leveraged. Our findings support the limited prior research suggesting a link between corporate governance quality and CSR disclosure in company annual reports and suggest that, rather than mandating specific disclosures, regulators might be better served focussing on corporate governance quality as a way of increasing CSR disclosures. (shrink)

According to the Dutch Ministry of Economic Affairs (2001), transparency by means of Sustainability Reporting should lead to better Corporate Social Responsibility (CSR) performance of companies. Sustainability Reporting should also give consumers the information they need to purchase the most sustainable products available (Dutch Ministry of Economic Affairs, 2004). This article analyses the driving factors influencing CSR and Sustainability Reporting at seven breweries in the Netherlands. It also gives a better understanding of organizational behaviour with reference to CSR and (...) the reasons breweries have for Sustainability Reporting. The Dutch government has no intention of forcing organizations to publish a sustainability report, since it is trying to diminish the volume of legislation. Rather, the government prefers to rely on the willingness and initiatives of organizations to make CSR a success. In 2006, the Dutch Ministry of Economic Affairs will evaluate the effect of its CSR policy. But is it a success already? During our research, breweries appeared to find CSR more important than Sustainability Reporting. Sustainability reporting is, for most breweries, not the way to reach stakeholders. Most stakeholders have their own means for receiving information e.g. annual reports, meetings, public statements and press releases. Although small breweries think CSR is very important, they feel no pressure from outside to publish a sustainability report. For them it is very complex and expensive to publish a sustainability report. Large breweries feel pressure from many stakeholders to be transparent, but not on a regular basis. We conclude from this research that CSR does not stimulate Sustainability Reporting, but neither does Sustainability Reporting stimulate CSR. (shrink)

This paper demonstrates the political perspective of corporate social responsibility disclosures and, drawing on Weber’s notion of traditionalism, seeks to explain what motivates companies to make such disclosures in a traditional setting. Annual reports of 23 banking companies in Bangladesh are analysed over the period 2009–2012. This is supplemented by a review of documentary evidence on the political and social activities of corporations and reports published in national and international newspapers. We found that, in the banking (...) companies over the period of study, apparently neutral, corporate, philanthropic activities disclosed and promoted in CSR reports are inextricably linked to powerful leaders’ personal projects and the ruling party’s agendas. We have demonstrated elements of traditional societies, including personal loyalty and the public display of loyalty, the master–servant relationship, and obedience to personal rather than formal authority, provide an understanding of why banks have employed politically charged CSR disclosure strategies. The paper contributes to disclosure studies where political motivations of corporate disclosure rarely discussed. The paper extends the debate on political CSR by demonstrating that the role of family and familial values at the organisational and national levels may be much more important when it comes to CSR disclosure and activities. (shrink)

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period (...) 2009–2011 and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns. (shrink)

This study surveyed investors to determine the extent to which they preferred ethical behavior to profits and their interest in having information about corporate ethical behavior reported in the corporate annual report. First, investors were asked to determine what penalties should be assessed against employees who engage in profitable, but unethical, behavior. Second, investors were asked about their interest in using the annual report to disclose the ethical performance of the corporation and company officials. Finally, investors (...) were asked if they felt that ethics reports should be audited.The survey results indicate that many shareholders (42%) do not expect a high level of ethical behavior from corporate employees or officers. There is a significant amount of interest in disclosure of ethical issues (72%) and unwillingness to trust management to provide unbiased reports of ethical behavior. If such reports are included with the financial statements, 32 percent of the investors surveyed would prefer to have them audited to provide independent verification. (shrink)

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial (...) ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures. (shrink)

There is a growing global interest in social responsibility and sustainability across all sectors. Other than economic performance, stakeholders are now also concerned about the social and environmental impacts of corporations. Additionally, stakeholders are obtaining a higher salience level and expect organisations to operate sustainably. The banking sector has not been an exception, as banks can have significant impact on their customers, employees, and society in various ways. Given the intertwined links of Islam and ethical principles, it is expected that (...) Islamic banks will show a high level of commitment towards social responsibility (SR) and ethical practices. The current study investigates this issue by examining the annual reports of three fully-fledged Islamic commercial banks in Indonesia over the period of 2007 to 2011. It was found that only two of the investigated banks had continuous improvement in their SR disclosure. Additionally, it was revealed that the highest disclosures have been for ‘corporate vision’ and ‘board of directors and top management’, while the lowest disclosures were evident for ‘environment’ and ‘product, services and fair dealing with supply chain’. (shrink)

This article investigates how companies make sense of CSR. It is based on an explorative comparative case study of 18 companies in the Netherlands using background information, interviews and annual reports. Initially, the sensemaking process of CSR is guided and coordinated by change agents who are specifically appointed to explore the implementation of CSR in their company. These change agents initiate the CSR process within their own organisations. The meaning they develop stems from their personal and organisational values (...) and frames of reference. By attuning the vocabulary of CSR to the language of their colleagues, they aim to gain support for this undertaking in their organisation. This sensemaking procedure can be divided into pragmatic, external, procedural, policy‐oriented and value‐driven processes. The capability of an organisation to embed CSR is the result of trial and error, personal preferences and the use of language by the change agent that fits the (dynamic) situation at hand. Thus, each organisation needs a tailor‐made approach to implement CSR successfully. (shrink)

We explore the language of leadership of global media mogul Rupert Murdoch in 2010, the year before the phone-hacking scandal in the UK came to public attention. Subsequent public enquiries in the UK exposed unethical conduct by staff of News Corporation, a global corporation whose Chairman and CEO was Rupert Murdoch. We focus on the ethical climate fashioned by ‘A Letter from Rupert Murdoch’ that appeared in the opening pages of the annual report of News Corporation for the year (...) ended 30 June 2010. Plausibly, Murdoch’s discourse in that letter helped condition the inapt, unethical conduct of News Corporation staff. We highlight the cultural and ethical signs that were embedded in Murdoch’s letter and which reflected the company’s tone at the top and ethical values. We identify signs of a perverse leadership thinking that possibly help explain the inappropriate cultural values and ethical behaviours that were revealed subsequently in evidence presented to public inquiries. (shrink)

This paper examines the relationship between corporate social responsibility and financial performance for Islamic banks in the Gulf Cooperation Council region over the period 2000–2014 by generating CSR-related data through disclosure analysis of the annual reports of the sampled banks. The findings of this study indicate that there is a significant positive relationship between CSR disclosure and the financial performance of Islamic banks in the GCC countries. The results also show a positive relationship between CSR disclosure and (...) the future financial performance of GCC Islamic banks, potentially indicating that current CSR activities carried out by Islamic banks in the GCC could have a long-term impact on their financial performance. Furthermore, despite demonstrating a significant positive relationship between the composite measure of the CSR disclosure index and financial performance, the findings show no statistically significant relationship between the individual dimensions of the CSR disclosure index and the current financial performance measure except for ‘mission and vision’ and ‘products and services’. Similarly, the empirical results detect a positive significant association only between ‘mission and vision’ dimension and future financial performance of the examined banks. (shrink)

This study addressed the questions of perceived importance of social responsibility information (SRI) characteristics in a decision context, as well as the attitudes of institutional investors toward social responsibility involvement. The results showed that SRI presently disclosed in company annual reports did not have any significant impact on institutional investors' decisions. However, if SRI were presented in quantified, financial form, and were focused on product improvement and fair business practices, such information would be perceived as more important for (...) investment decisions. Attitudes toward corporate social responsibility also suggested that institutional investors were not totally opposed to company involvement in social activities. (shrink)

The intention of this paper is to examine the impact of corporate social responsibility disclosure on financial performance in a case study of listed Pharmaceutical firms in Pakistan. For this case study, the panel data of 10 years from 2005 to 2014 are obtained through content analysis of annual reports. Quantitative tools were used to measure variables studied in which index was developed and used scoring methodology. Further, brand equity is introduced as a mediator between CSRD and (...) financial performance. The results of content analysis revealed that GSK Pakistan laboratories involved in greater level of disclosure as compared to other pharmaceutical firms. The average rate of disclosure of listed pharmaceutical firms is increasing annually. Among four themes, the results showed that pharmaceutical firms mostly disclose information regarding community involvement. The results of regression which were significant shows that brand equity act as mediator between the corporate social responsibility disclosure and financial performance. (shrink)

This study examines the effect of directors’ human and social capital on the level of corporate social responsibility disclosures by drawing on insights from a resource-based view. It also investigates the effect of chief executive officer power on this relationship. Data were obtained from annual reports of companies listed on the Dhaka Stock Exchange in Bangladesh from 2005 to 2013. We employ outside directors’ experiences and expertise as a proxy for board capital and measure CEO power using (...) a ‘power index’ that comprises CEO duality, ownership, tenure and family CEO status. Results show that board capital is positively associated with CSR disclosure levels; however, CEO power is negatively associated with CSR disclosures and reduces the effect of board capital on CSR disclosures. Thus, we conclude that although board capital can improve CSR practices, CEO power can also inhibit these practices. (shrink)

To study how populist sentiments have increasingly influenced businesses in society, we examine how German and Swedish corporations addressed the refugee situation in their 2015 and 2016 annual reports. We find that corporations changed their communication once refugee migration became subjected to populist political sentiments, but that they did so without subscribing to those sentiments. Although populism is based on such sharp oppositions as welcoming refugees or closing borders, our analysis shows that corporations have found ways to communicate (...) about the refugee migration beyond these oppositions. Rather than taking a political stance, the corporations studied have primarily articulated the refugee situation as it pertains to their business operations. We identify four modes of articulation: the refugee as someone needing international aid, as a factor for economic analysis, as a benefit recipient, or as a potential stakeholder. These findings help nuance our understanding of how corporations navigate contested political issues. (shrink)

This article explores how corporate governance processes and structures are being used in large Australian companies to develop, lead and implement corporate responsibility strategies. It presents an empirical analysis of the governance of sustainability in fifty large listed companies based on each company’s disclosures in annual and sustainability reports. We find that significant progress is being made by large listed Australian companies towards integrating sustainability into core business operations. There is evidence of leadership structures being put (...) in place to ensure that board and senior management are involved in sustainability strategy development and are then incentivised to monitor and ensure implementation of that strategy through financial rewards. There is evidence of a willingness to engage and communicate clearly the results of these strategies to interested stakeholders. Overall, there appears to be a developing acceptance amongst large corporations that efforts towards improved corporate sustainability are not only expected but are of value to the business. We suggest that this is evidence of a managerial shift away from an orthodox shareholder primacy understanding of the corporation towards a more enlightened shareholder value approach, often encompassing a stakeholder-orientated view of business strategy. However, strong underlying tensions remain due to the insistent market emphasis on shareholder value. (shrink)

Although many challenges remain, business ethics is flourishing in North America. Prominent organizations give annual business ethics awards, investments in socially screened mutual funds are increasing, ethics officers and corporate ombudspersons are more common and more influential, and new ideas are being tested in practice. On the academic side, two major journals specializing in business ethics are well-established and other major journals often include articles on business ethics and new organizations emphasizing ethics have been initiated. Within business schools, (...) the number of endowed chairs is growing and the ethics curriculum is expanding. Canada is a major player in the business ethics discipline while business ethics in Mexico is just beginning to emerge as a focus of interest in both the business and academic communities. (shrink)

A number of studies have tested the relationship between a corporation's social and ethical performance and its financial performance. In contrast, this is the first study to demonstrate a link between overall financial performance and an emphasis on ethics as an aspect of corporate governance. It identifies the 26.8 percent of the 500 largest U.S. public corporations that, in their annual report to shareholders, commit to ethical behavior toward their stakeholders or emphasize compliance with their code of conduct. (...) The financial performance of these corporations ranks higher than that of those who do not at a significance level of p = < 0.005, using the 1997 Business Week ranking which averages eight publicly-reported measures of historical financial performance. These findings should motivate more corporations to utilize the principles of Social and Ethical Accounting, Auditing and Reporting (SEAAR). (shrink)

Researchers and practitioners have devoted considerable attention to firms'' policies regarding discretionary disclosures. Prior studies argue that firms increase demand for their debt and equity issues and, thus, lower their cost of capital, by providing more informative disclosures. However, empirical research has generally not been able to document significant benefits from increased disclosure.This paper proposes an alternative explanation – firms disclose because it is the socially responsible thing to do. We argue that companies have incentives to engage in stakeholder management (...) by undertaking socially responsible activities and that providing extensive and informative disclosures is one such practice.We examine the relationship between firms'' disclosures and measures of social responsibility. We use ratings provided by the Council on Economic Priorities as proxies for the degree of social responsibility adopted by the sample firms. Disclosure rankings provided by the annual Association for Investment Management and Research Corporate Information Committee Reports (AIMR Reports) are used to measure disclosure level.Our results indicate that there is a positive relationship between disclosure level and corporate social responsibility. That is, firms that engage in socially responsive activities provide more informative and/or extensive disclosures than do companies that are less focused on advancing social goals. In addition, we find that socially responsible firms are more likely to provide this increased disclosure through better investor relations practices. These results support our contention that increased disclosure is a form of socially responsible behavior. (shrink)

Several studies have focused on the effects of corporate social responsibility fit on external stakeholders’ evaluations of CSR activities, attitudes towards companies or brands, and behaviors. The results so far have been contradictory. A possible reason may be that the concept of CSR fit is more complicated than previously assumed. Researchers suggest that there may be different types of CSR fit, but so far no empirical research has focused on a typology of CSR fit. This study fills this gap, (...) describing a qualitative content analysis of the congruence between six organizations and their various CSR activities. Ten annual reports and CSR reports were analyzed, and 102 specific CSR activities were identified. The results show that two levels of fit must be distinguished: based on the means for and the intended ends of the CSR activity. Furthermore, six different types of fit were found, focusing on products and services, production processes, environmental impact, employees, suppliers, and geographical location. Considering the above variety of fit possibilities, the findings emphasize the role of CSR communication as a means of creating fit perceptions. (shrink)

While commentators have long decried managerial short-termism, the deleterious effects of managerial short-termism on corporate social performance (CSP), and how to ameliorate those negative effects, remain underexplored. Specifically, due to the difficulty of unobtrusively measuring what is fundamentally a cognition in managers, empirical evidence at the organizational level of managerial short-termism’s effect on CSP is relatively sparse. Here, we measure managerial short-termism by content analyzing firms’ publicly filed annual reports (10-Ks). Using a combined dataset for 1,665 U.S. (...) firms for the period 2000–2012, we show that managerial short-termism is negatively associated with CSP. However, we also show that this effect can be reduced through increased external monitoring by important stakeholders who value CSP. Specifically, we show that increasing dedicated institutional ownership and increasing analyst coverage both decrease the negative effect of managerial short-termism on CSP. We contribute to theory by predicting and showing the negative effect of managerial short-termism on CSP, and how external monitoring can reduce its deleterious effects. We contribute to practice by showing how this managerial cognition can be identified, and how its negative effects can be ameliorated, at the organizational level. (shrink)

This paper examines how board gender diversity affects corporate risk disclosure. We exploit an exogenous shock on firms’ risk environment created by the United Kingdom’s vote to leave the European Union and analyze related risk disclosure in annual reports of public firms in the UK. Using this unique setting, we mitigate concerns about omitted variables in concurrent studies. The findings suggest that board gender diversity is positively related to corporate risk disclosure. However, our results also indicate (...) that the proportion of female directors needs to reach a critical mass to impact the risk disclosure decision. Moreover, we find lower bid–ask spreads immediately after the referendum date for those firms that disclosed Brexit-related risks in their annual reports prior to the vote. Collectively, our results are consistent with board gender diversity promoting the disclosure of decision-relevant information through improved board group dynamics. (shrink)

This study investigates the social and environmental disclosure practices of socially responsible Chinese listed firms as displayed in their annual reports and corporate social responsibility reports from the perspective of stakeholders. A stakeholder-driven, three-dimensional social and environmental disclosure index that integrates the quantity and two aspects of the quality of disclosure perceived by stakeholders is constructed to assess the social and environmental disclosures in firm annual reports and CSR reports. The study results indicate (...) that stakeholders perceive different disclosure types and disclosure items as important to differing degrees. CSR reports provide more stakeholder-relevant social and environmental disclosure than annual reports. (shrink)

The literature presents a broad approach to Corporate Social Responsibility, which aggregates a diversity of issues, such as the environment, labor conditions, and human rights. We addressed the impact of increasing CSR demands during the internationalization of emerging market multinationals on one particular subject, animal welfare. This subject raises important ethical concerns, especially as we understand that animals are sentient beings. Through content analysis of annual reports, we tracked the evolution of AW-CSR activities throughout the internationalization of (...) two large Brazilian meat-processing multinationals as they accessed markets with complex AW regulations. We also synthetized findings on broiler chicken on-farm AW research in Brazil and conducted interviews to gauge the impact of CSR standards on animals. Our findings show that, although EMNs that enter developed markets engage with various standards, the impacts of standard enforcement on actual welfare are not straightforward and call for broader AW and animal ethics developments. Uneven results among AW criteria indicate that some aspects are prioritized over others. Furthermore, some actions of actors such as EMNs and low-tier suppliers seem to counterbalance the expected impact of normative pressures to change the lives of animals for the better. We conclude that AW standards may improve AW in emerging markets; but these standards do not appear to be sufficiently stringent, and require improvements to have a more significant positive impact. A major signal emerging from this research is the fundamental need to broaden the animal ethics debate regarding the use of animals to produce meat. (shrink)

This study examined the potential for a new area of corporate social responsibility washing: gender equality. Companies are increasingly recognized for advertisements promoting gender equality, termed “femvertisements.” However, it is unclear whether companies that win femvertising awards actually support women with an institutionalized approach to gender equality. A quantitative content analysis was performed assessing company leadership team listings, annual reports, CSR reports, and CSR websites of 61 US-based companies to compare the prevalence of internal and external (...) gender-equality CSR activities of companies that have won femvertising awards. When controlling for number of employees and annual revenue, award-winning companies committed to more internal efforts that support women than non-award-winning companies. However, no significant differences were found in the number of external efforts or representation in female leadership between companies with and without award-winning femvertisements. Overall, a majority of award-winning companies engaged in less than ten of the possible 23 gender-equality CSR activities, suggesting these companies’ female empowerment commercials were often not in line with their broader CSR activities. While more research is needed in this area, we propose the term “fempower-washing” to describe CSR-washing in the context of gender equality. (shrink)

Several studies have focused on the effects of corporate social responsibility fit on external stakeholders’ evaluations of CSR activities, attitudes towards companies or brands, and behaviors. The results so far have been contradictory. A possible reason may be that the concept of CSR fit is more complicated than previously assumed. Researchers suggest that there may be different types of CSR fit, but so far no empirical research has focused on a typology of CSR fit. This study fills this gap, (...) describing a qualitative content analysis of the congruence between six organizations and their various CSR activities. Ten annual reports and CSR reports were analyzed, and 102 specific CSR activities were identified. The results show that two levels of fit must be distinguished: based on the means for and the intended ends of the CSR activity. Furthermore, six different types of fit were found, focusing on products and services, production processes, environmental impact, employees, suppliers, and geographical location. Considering the above variety of fit possibilities, the findings emphasize the role of CSR communication as a means of creating fit perceptions. (shrink)

Trust is both ethically important and essential for business but difficult to measure. This paper contributes toward clarifying the nature of trust in a way that is both conceptually helpful for ethical inquiries concerning business and pertinent to the measurement of trust as an element in organizations. Several papers hypothesize that increasing the role of trust in a corporation reduces the need for external monitoring and contracts. Assessing this important hypothesis requires a way to gauge whether a firm has a (...) trusting corporate culture. We develop an objective measure of trust in a firm’s corporate culture by counting the number of times 21 trust-related words appear in an important kind of document: the Management Discussion and Analysis section of the annual report. We report two significant findings: that, contrary to what one might think, firms with a trusting culture frequently use audit and control-type words and that trust is positively linked with subsequent share price volatility. We propose explanations of these findings with the hope of facilitating the objective measurement of trust and enhancement of a trusting atmosphere in corporate culture. (shrink)

A growing number of multinational companies (MNCs) report on their progress toward contributing to the Sustainable Development Goals (SDGs) in their annual reports, yet the amount and quality of the information they disclose varies significantly. The aim of this study is twofold: First, we investigate how transparent MNCs report on their SDG engagement and second, we study how the reported SDG engagement changed over time due to major shifts in sustainability reporting requirements. Using a dataset of the largest (...) German MNCs, we analyze their disclosure of SDG contribution reporting practices. Our results show that, overall, between 2016 and 2021 all German MNCs increased their SDG reporting activity and that the MNCs adopted four different practices to report their SDG engagement. We also found that the largest MNCs were more transparent and systematic in their SDG reporting than smaller MNCs, whose reporting was more heterogeneous. Our study contributes to legitimacy research and the role of transparency in corporate reporting as well as the debates on the efficacy of sustainability reporting legislation in the context of SDG engagement. Our findings imply that regulations on environmental and social regulation increase the transparency of sustainability reporting. (shrink)

This exploratory study investigates firms’ implementation of a new corporate governance code in Mauritius, a developing economy. The authors rely on annual report disclosures during a four-year period. The authors analyze the level of corporate engagement with the code’s requirements, including corporate social responsibility initiatives, relative to a 2004 benchmark over the three subsequent years. The study contributes to the literature in two ways. First, it provides much needed evidence of longitudinal implementation within developing economies that (...) exhibit, or have started to exhibit, a combination of ownership and control features found in more advanced economies and characterized in the literature as an “emerging governance” model. Second, the authors develop a more comprehensive assessment of implementation using a scoring system that combines trichotomous weighting of each governance component and trichotomous rating of implementation of each component. The authors argue that this system is superior to the un-weighted, dichotomous approach typically used in the literature. The analysis of weighted assessment scores for reveals a significant implementation of the code initially after 2004; but implementation began to level off by 2007 well below maximum assignable scores. Detailed requirements regarding directors’ appraisal and training, remuneration policies and remuneration information appear to be ignored by companies through 2007. A correlation analysis of the corporate governance scores and firm-based measures shows that the association between these different variables fluctuates significantly over the implementation window. (shrink)

This research applies the theory of planned behavior to corporate managers’ decision making as it relates to fraudulent financial reporting. Specifically, we conducted two studies to examine the effects of attitude, subjective norm and perceived control on managers’ decisions to violate generally accepted accounting principles (GAAP) in order to meet an earnings target and receive an annual bonus. The results suggest that the theory of planned behavior predicts whether managers’ decisions are ethical or unethical. These findings are relevant (...) to corporate leaders who seek to improve ethical work climates of organizations and to many regulators, accountants, corporate governance officials and investors. (shrink)

We examine the occurrence of ethicsrelated terms in 10-K annual reports over 1994-2006 and offer empirical observations on the conceptual framework of Erhard et al. 2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related phenomena. We find that firms using ethics-related terms are more likely to be "sin" stocks, are more likely to be the object of class action lawsuits, and are (...) more likely to score poorly on measures of corporate governance. The consistency of our results across these alternative measures of ethical behavior suggests that managers who portray their firm as "ethical" in 10-K reports are more likely to be systematically misleading the public. These results are consistent with the integrity-performance paradox. (shrink)