One central point of criticism concerns the selectivity in CSR reporting in terms of what is reported on Coombs and Holladay, With the GRI's acceptance and its focus on transparency and balance in mind, the research question arises as to whether firms follow the principle of balance and how much of the reports' contents are negative. As negative incidences like failures, setbacks and self-criticism are value-relevant and important material to firms' stakeholders, adhering to the principle of balance in reporting — i.
However, research on negative CSP disclosures is limited. Qualitative research has also been used to unveil impression management and neutralization techniques in CSR reports by firms in the energy Talbot and Boiral, and mining Boiral, sectors. These studies provide in-depth insights into the rhetorical strategies firms use to rationalize, justify or conceal their impacts to limit negative disclosures.
In terms of quantity, Holder-Webb et al. Similar conclusions were reached for environmental reporting practices of Australian firms Deegan and Gordon, ; Deegan and Rankin, The most recent findings on the quantity of negative CSP disclosures come from outside academia. Drawing on their analysis of CSR reports published by the world's largest firms Fortune ranking , KPMG concluded that most firms offer limited or no information on challenges, setbacks and failures.
This analysis found that only 23 percent of the reports are balanced, and that reports by European firms were the most balanced while those by Asia Pacific firms were the least balanced. In their report, KPMG noted no improvement in average reporting quality. These findings suggest limited adherence to the principle of balance, as well as geographical and cultural differences.
In this study, we extend the limited scholarly research on negative CSP disclosures in CSR reports in three important ways. First, we determine the amount of negative disclosures in CSR reports from large firms. Second, we analyze the topics communicated and the legitimation strategies used when reporting on negative CSP.
The legitimacy theory is a widely used framework that is often used to explain disclosures about firms' CSP. Establishing firms as part of a broader social system, the legitimacy theory suggests that firms do not have an inherent right to resources or even to existence.
Society assigns legitimacy to firms Deegan, , and legitimacy is vital to their survival Dowling and Pfeffer, In the organizational context, Suchman defined legitimacy as the perception that a firm's actions are in line with the perceivers' socially constructed system of norms, values, beliefs and definitions. Because stakeholders do not have access to organizational decision-making, they must have transparency to see that organizations are acting in line with their expectations.
The legitimacy theory sees CSR reporting as a way for organizations to answer claims coming from society. CSR reports provide information to a number of stakeholders who control different resources and pursue various interests and who, thus, demand disclosure from the firm.
CSR reports enable firms to legitimize themselves, their behavior and the effects of their behavior Brown and Deegan, ; Neu et al. In addition, empirical research shows that shareholders benefit from positive CSP, and that negative CSP carries idiosyncratic risk Mishra and Modi, This leads firms to tend to not disclose the negative aspects related to their CSP.
However, without disclosing some setbacks or failures, firms can encounter increased skepticism regarding the reliability and usefulness of their CSR reports.
Negative CSP disclosures are necessary to attain corporate transparency Rawlins, , yet regulatory requirements dictating that firms make negative CSP disclosures are limited. Balance does not mean that firms need to report an equal number of positive and negative aspects, but rather that negative aspects need to be disclosed in addition to highlighting the firm's positive actions and impacts. We note two differences between our definition and the former.
Because information regarding potential negative conduct does not constitute actual CSP negative CSP such as setbacks, failures or unmet goals , a negative statement involving speculation, uncertainty or hedging would not count as a negative CSP disclosure in our definition.
As our study concerns the quantity of negative CSP disclosures across the full range of CSR reporting, the inclusion of economic aspects is necessary for this study to be comprehensive. We assume this occurs because they fear that disclosing setbacks, failures or unmet goals puts legitimacy — and, in the case of publicly traded firms, financial performance — at risk Mishra and Modi, In fact, research shows that negative information is highly diagnostic because people believe it to be more characteristic of actors who belong in negative categories Skowronski and Carlston, However, research on the effects of two-sided messages has revealed that disclosing negative information in addition to positive information has positive effects on people's judgments of source credibility Kamins and Assael, ; Smith and Hunt, Wagner et al.
Therefore, our first research question is: RQ1. They posit that using external, independent reviews of sustainability management processes and disclosures will increase the robustness, accuracy and trustworthiness of CSP disclosures, as well as build confidence in the areas of governance, management and stakeholder relations GRI, Despite some scholars' criticism concerning ambiguity and diversity in the criteria and scope of external assurance, as well as the independence of assurance practitioners e.
Deegan et al. Reporting frameworks like the one issued by the GRI offer a comprehensive list of topics and indicators. The GRI framework versions G3. The GRI provides several performance indicators for each aspect. Thus, it is likely that most negative CSP disclosures will involve social and environmental aspects. Within these two areas, certain disclosures are mandatory.
For example, in environmental reporting, various governmental bodies require firms to report their emissions of greenhouse gases GHG. In social reporting, mandates include aspects of organizational safety and health, such as workplace fatalities and injuries. To show compliance with these norms, firms align their disclosures to the demands of the agencies to which they provide the report, a process that has been called disclosure alignment Carroll and Einwiller, Firms need to show that they understand what is asked of them and that they are willing to be accountable.
In support of the argument that regulatory pressures from the state induce greater disclosure, Freedman and Jaggi showed that firms from the countries that have ratified the Kyoto Protocol report more detailed disclosures on climate change issues. Similarly, Reid and Toffel found that firms' participation in the Carbon Disclosure Project positively corresponded to greater state-level pressure regarding climate change concerns.
Thus, we assume that most negative CSP disclosures will deal with those topics governed by national or transnational regulations. Negative CSP disclosures in CSR reports of firms mostly refer to topics on which firms are mandated to report by national or transnational regulations. Research on cultural differences in CSR reporting has mainly focused on similarities and differences in publishing a report and the general topics reported on e. Kolk, , Our comparison examines large firms headquartered in three economically powerful cultural clusters Gupta et al.
These clusters come from the ten clusters that were determined based on data from the GLOBE study pertaining to cultural values and beliefs House et al. The results of this study showed that cultural cluster effects account for more than two-third of inter-societal differences in values and certain practices, such as institutional collectivism.
In particular, differences in individualism-collectivism and the role of face suggest cultural variations in the quantity of negative CSP disclosures.
Individualism-collectivism is likely the most widely studied dimension of cultural variability. Cultures that score high on the individualism end of the continuum emphasize personal goals over group goals and stress values that benefit the individual person e. Triandis, By contrast, collectivist societies centralize social units with common fate, common goals and common values; the primary value is harmony with others Triandis Individualism typifies the Anglo-American culture Hofstede et al.
Collective values, social relationships and harmony are strongest in cultures influenced by Confucianism such as China, South Korea and Japan e. Zhang et al. Considering the value of the collective in collectivist societies, we would expect that firms in these societies are more likely to disclose information that stakeholders and society deem material, including negative CSP. However, other characteristics of collectivist cultures — like preserving social harmony and keeping face — would suggest the opposite.
While people in all cultures try to keep face in most interactions, the importance of face is higher in collectivist societies Varner and Beamer, Face is understood as a claimed sense of favorable social self-worth and an estimated other-worth in an interpersonal situation Ting-Toomey and Kurogi, Face is kept or lost by complying with or violating the behavior expected of a person. In collectivistic cultures, keeping structural harmony is of importance Bond and Hwang, Because of this greater cost of losing face and of disrupting harmony, firms from Confucian Asian countries might make fewer negative CSP disclosures than firms from individualistic cultures.
When firms disclose negative CSP, they jeopardize face and thus social harmony. Corrective action : Ideas, intent or measures are offered for how to tackle or avoid the negative aspect in the future, or information is provided on measures already undertaken to correct the problem.
Rationalization : Negative aspects are explained and justified by referring to the utility or function of specific actions or practices. Abstraction : Existence of a negative aspect is generalized as being prevalent throughout a whole industry. Authorization : A reference is made to a higher authority to deliver external explanations, validations and judgments of the negative aspect. Here, third parties or authorities provide an apparently more objective justification for the incident.
Because face is more important in collectivist than in individualist societies Ho, ; Varner and Beamer, , it can be expected that firms based in Confucian Asian countries more often apply legitimation strategies to protect face and legitimacy.
This means that they offer a justification for a setback or failure authorization and rationalization , or that they generalize abstraction or marginalize marginalization the negative aspect. We expect that firms from Confucian Asian cultures will more often communicate a corrective action by which the firm shows the ability to improve and to prevent negative impacts in the future.
CSR reports were downloaded from the firms' websites. For the sake of comparability, we did not include integrated reports, as these would have disproportionately biased the economic aspects. We selected reports wholly or partially concerning the , with a published English version. In case of a report in multiple languages, all analyses refer only to the English language pages.
Table I gives an overview of the sample. The sectors were evenly distributed across cultural clusters. We applied a combination of qualitative and quantitative manual content analysis in two phases. In Phase 1, a group of 20 coders master's level students majoring in communication science were extensively trained to identify negative CSP disclosures in the reports; in Phase 2, they coded the manifest and latent content Potter and Levine-Donnerstein, In the first phase, a team of two coders ten teams in total closely read each report to find passages with negative CSP disclosures per the definition laid out above: any corporate statement referring to factual corporate conduct regarding social, environmental or economic aspects, which had or have a potential or actual negative impact on the realization of sustainability.
A negative CSP disclosure was considered complete if it referred to one subtopic within a topic area Table II , and it usually spanned 2—4 sentences. Any existing supplementary tables or figures on the same topic were coded as part of the same disclosure. The total number of pages relevant to the analyses was 6, The focus of the analyses was the narrative, i.
However, we considered tables and figures when they formed less than 50 percent of a page or when they complemented the narrative, although we excluded tabular overviews included at the end of a report. Potential content had to meet several criteria. First, the negative impact needed to be manifest content Potter and Levine-Donnerstein, within the passage, without any further exploration or speculation.
Second, coders were instructed to only select content that could be considered negative regardless of the cultural background. Third, descriptions of negative externalities e. Fourth and finally, statements in the subjunctive mood e. After reading, the two coders compared their finds and discussed inconsistencies. When the coders could not agree as to whether an aspect qualified as negative, a third coder was called in to break the tie.
The authors then double-checked the passages chosen by the coders to see if they fit with the definition of negative CSP disclosure. At the end of this first phase, a total of negative CSP disclosure passages were identified. In the second phase, we developed a codebook with nine manifest and seven latent categories see Appendix.
For topic area, we adapted the categories from the GRI guidelines. Examples for the latent categories represented in the current data are included in the Appendix. Thus, the content analysis is mainly concept-driven, but is in some parts, also data-driven. We determined this by first assessing the proportion a negative CSP disclosure took up in a page, then adding up the proportions in a report and then dividing that sum by the total number of relevant pages.
Our results show that, on average, 0. We conducted an analysis of variance ANOVA and planned comparisons tests to investigate the hypothesis that firms from individualistic cultures made more negative CSP disclosures than firms from collectivistic cultures. Five of the firms four of them Japanese included a third-party opinion by external experts instead of external assurance.
Analysis of covariance ANCOVA was conducted to test the hypothesis that externally assured reports contain more negative CSP disclosures than those that are not externally assured.
Two dummy-coded variables for cultural cluster served as covariates to control for culture effects. Thus, H1 is confirmed, although the effect barely reaches significance. Skip to main content Skip to table of contents. This service is more advanced with JavaScript available. Encyclopedia of Corporate Social Responsibility Edition.
Editors: Samuel O. Contents Search. Disclosure CSR Reporting. Authors Authors and affiliations Philipp Schreck. How to cite. Synonyms Corporate citizenship reporting ; Nonfinancial disclosure ; Nonfinancial reporting ; Social and environmental disclosure ; Sustainability reporting ; Triple bottom-line reporting.
This is a preview of subscription content, log in to check access. Brammer, S. Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment, 17 2 , — Google Scholar.
Clarkson, P. Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Cormier, D. Even though some researchers argue that the political cost hypothesis does not fully and satisfactorily explain the reasons for voluntary CSR disclosure Milne , we believe that its assumption provides at least some explanation for companies voluntarily disclosing CSR information.
Finally, big companies disclose more than small companies. These results are mostly consistent with the political cost theory, from which we derive our hypotheses. Failure to remove informational asymmetries i. Our results also suggest that there are some differences in the disclosure dimensions: environmental disclosures appear to be driven by somewhat different firm characteristics than social disclosures.
A potential reason is that these factors relate to different stakeholder groups; for example, environmental stakeholder groups may emphasize environmental disclosure while consumer groups may emphasize labor practices. As with all empirical studies, this study is subject to limitations.
First of all, the industry classification is open to criticism, as some industries are represented by only three or fewer companies. Third, content analysis also has its limitations: using keywords as units of analysis may be an inappropriate methodology, as these words are detached from their textual background. While we account for unusual scores in some reports, our results may have been affected by our methodology.
Finally, deriving the keywords for the content analysis from the GRI guidelines is not free of risk, as the guidelines might not capture all of the relevant CSR aspects Moneva et al. Despite these limitations, we believe that our results provide interesting insights into the determinants of CSR disclosure. In addition to the limitations mentioned previously, there are other opportunities in the field of CSR disclosure.
For example, a broader set of variables that can act as proxies for other stakeholder groups could be considered as possible determinants of CSR disclosure. On the other hand, the receivers of information have to be integrated into the research in order to analyze the linkage between neo-classical theory and CSR disclosure.
See Table 6. Historically, economists have developed two contrary approaches to CSR. Hence, companies should only undertake actions which either increase profits or decrease costs, while adhering to all legal principles and protecting its integrity Friedman , ; Husted and Salzar ; Rappaport On the other hand, the stakeholder approach constitutes the theoretical basis of most arguments supporting CSR.
Firm size, for instance, has often been mentioned as a central indicator of the amount of political or societal costs but was found to act as a proxy for more than just political costs Ball and Foster ; Milne Alternatively, profitability could also indicate that the company might not care about social and environmental aspects.
However, it is unlikely that this argument is viable in the long run. Note that there are also considerable differences with regard to the required disclosures across European countries. For example, in the Netherlands, more than firms with a significant environmental impact are required to publish environmental reports. This legal obligation strongly influences disclosure levels, since the relevant companies disclose much more CSR information than their counterparts Kolk et al. However, firms in our sample are not required to disclose information; therefore, we expect that those with a US listing will tend to provide more CSR information to comply with customary US disclosure patterns.
Considering more than four reporting periods in our analysis would therefore have disproportionately shortened the number of observations in the sample. Alternatively, we could have used sales in the US as a proxy. We decided to use US stock listing as the literature e. Companies with high total assets are generally from the manufacturing and energy supplying industry. Over the same period, the average number of pages in the analyzed reports increased from in to in per company-year observation.
However, in order to ensure that there is no multicollinearity, we performed an additional test by calculating the variance inflation factor VIF for all the variables where the bivariate correlations exceed the value of 0. The results indicate that all VIF factors are well below the tolerance values of 10, indicating that multicollinearity is not an issue in our analyses Hair et al.
Abdolmohammadi MJ Intellectual capital disclosure and market capitalisation. J Intellect Cap — Article Google Scholar. An investigation of stakeholder attributes and salience, corporate performance, and CEO values. Acad Manag J — Aupperle G, Carrol A, Hatfield J An empirical examination of the relationship between corporate social responsibility and profitability.
Google Scholar. J Account Res — Bancel F, Mittoo UR European managerial perceptions of the net benefits of foreign stock listings. Eur Finan Manag 7 2 — Account Audit Account J 2 1 — Bewley K, Li Y Disclosure of environmental information by Canadian manufacturing companies: a voluntary disclosure perspective.
Adv Environ Account Manag — J Account Econ — Bowen HR Social responsibilities of the businessman. Harper and Row, New York. Brammer S, Millington A Firm size, organizational visibility and corporate philanthropy: an empirical analysis. Bus Ethics Eur Rev 15 1 :6— J Bus Finan Account 33 7 and 8 — Callens I, Tyteca D Towards indicators of sustainable development for firms: a productive efficiency perspective. Ecol Econ 28 1 — Campbell D A longitudinal and cross-sectional analysis of environmental disclosure in UK companies—a research note.
Br Account Rev — Carroll AB Corporate social responsibility—evolution of a definitional construct. Bus Soc 38 3 — Carroll AB Corporate social responsibility: a historical perspective. Praeger, Westport, pp 3— Int J Account — Chen S, Bouvain P Is corporate responsibility converging? J Bus Ethics — J Account Res 46 3 — Account Finan — Chizema A Institutions and voluntary compliance: the disclosure of individual executive pay in Germany.
Corp Gov 16 4 — Account Organ Soc. Cormier D, Gordon IM An examination of social and environmental reporting strategies: determinants, costs and benefits. Account Audit Account J — Account Organ Soc 12 3 — Corporate social responsibility as a field of scholarship.
Volume 1: theories and concepts of corporate social responsibility. Sage Publications, London, pp xvi—xxx. De Bakker F, Groenewegen P, Den Hond F A Bibliometric analysis of 30 years of research and theory on corporate social responsibility and corporate social performance.
Bus Soc 44 3 — Deegan C, Carroll G An analysis of incentives for australian firms to apply for reporting excellence awards. Account Bus Res 26 3 — Deegan C, Gordon B A study of the environmental disclosure practices of Australian corporations. Account Eur 6 1 — Accessed Feb Donaldson T, Preston L The stakeholder theory of the corporation: concepts, evidence, implications. Acad Manag Rev 20 1 — Dowling J, Pfeffer J Organizational legitimacy: social values and organizational behaviour.
Pac Sociol Rev 18 1 — Drucker PF The new meaning of corporate social responsibilities. Calif Manage Rev 26 2 — Dye RA Disclosure of nonproprietary information. J Account Res 23 1 — J Law Econ 26 2 — Farrar D, Glauber R Multicollinearity in regression analysis the problem revisited. Rev Econ Stat 49 1 — Freeman RE Strategic management: a stakeholder approach. Pitman, Boston. Friedman M Capitalism and freedom. University of Chicago Press, Chicago.
Friedman M The social responsibility of business is to increase its profits. Sage Publications, London, pp 69— Frooman J Stakeholder influence strategies. Acad Manag Rev 24 2 — Ghazali NAM Ownership structure and corporate social responsibility disclosure: some Malaysian evidence. Corp Gov 7 3 — Acad Manag Rev — Godfrey PC The relationship between corporate philanthropy and shareholder wealth: a risk management perspective. Account Audit Account J 8 2 — J Bus Finance Account 28 3 and 4 — GRI Website of global reporting initiative.
Accessed Dec Public Money Manag 28 6 — Account Bus Res — Account Forum — A global perspective. Pearson, Upper Saddle River. Account Rev — Handelsblatt Website of handelsblatt newspaper. Accessed March Healy PM, Palepu KG Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature.
J Account Econ 31 1—3 — Holsti OR Content analysis for the social sciences and humanities. Addison-Wesley, Reading. J Manag Stud 43 1 — Islam MA, Deegan C Media pressures and corporate disclosure of social responsibility performance: a case study of two Global clothing and sports retail companies.
Account Bus Res 40 2 — Finan Analysts J — Kolk A Environmental reporting by multinationals from the Triad: convergence or divergence. Manag Int Rev 45 1 —
0コメント