This article presents, an analysis of the opinions of assurance providers regarding the quality and the limitations of sustainability reports and their recommendations to improve them using the Global Reporting Initiative as a framework. The qualitative content analysis of 301 assurance statements for sustainability reports from mining and energy companies provides a comprehensive view of the main outcomes of the assurance process, including its limitations, the application of the GRI principles and suggestions for improving sustainability reports. Taking into account the (...) perceptions of practitioners a priori well informed on the quality of sustainability reports—namely assurance providers—this paper complements the current literature on sustainability reporting and its assurance, including critical approaches that question the reliability of sustainability reports, stakeholder engagement and the accountability of reporting practices. This study contributes to the debates surrounding the quality of sustainability reports, the added value of assurance statements and the ethical issues underlying the assurance process. It also contains important practical implications for auditors, standardization organizations and stakeholders. (shrink)

In recent years, companies receive pressure to release environmental, social, and governance disclosure, since these are perceived as critical issues by society. Despite this pressure, ESG disclosure practices considerably vary by firm. Prior academic literature investigated country- and firm-level factors determining such variation, alternatively adopting the institutional and legitimacy theory. By combining these theories in a unique framework, this study investigates the extent to which social structures and social legitimization influence ESG disclosure practices and each pillar. Results obtained using a (...) cross-country sample of 14,174 firm-year observations during 2005–2012 provide evidence that country-level characteristics such as a political system, labor system, and cultural system significantly affect firms’ ESG disclosure practices. However, their impact is heterogeneous in that they either reduce or enhance disclosure levels and may differ by pillar. Results for firm-level characteristics related to a firm’s visibility demonstrate a positive and homogeneous effect on ESG disclosure and each pillar. These results inform policy makers and regulators aiming to enhance ESG disclosure levels of the risk they incur when managing variables related to social structure and the benefits of exposing firms to higher visibility. (shrink)

Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011–2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. (...) However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management’s behaviour and be concerned about the achievement of sustainability goals. (shrink)

According to some philosophers and social scientists, mainstream economic theories currently play an unprecedented role in shaping human societies. This phenomenon can be linked to the dissemination of methodological individualism, where common goods are interpreted as reducible to aggregates of individuals' well-being. Nonetheless, some emergent difficulties of economics in coping with global institutional issues have encouraged some authors to revise that paradigm. In the last three decades, there has been a parallel growing philosophical interest in investigating social sciences' epistemological and (...) ontological foundations. Unfortunately, these two research trends have often not communicated systematically enough to understand the specific ontology of collective aims. It is still unclear whether some irreducible social goods exist and how the answer to this question can set up a consistent understanding of cooperative actions. This dissertation addresses this issue, drawing on philosophical investigations about collective intentionality. It claims that a coherent ontological taxonomy of irreducible and reducible social goods is theoretically viable and can reframe prevailing approaches to collective action dilemmas influenced by the traditional economic categorisation of goods. The research begins by analysing how the influential theory of public goods has paved the way for some social and moral impasses. Furthermore, some theoretical proposals suggesting the existence of relational goods and common-pool resources are scrutinised. Hence, a refutation of the ontological reduction of all social goods to individual ones is developed, arguing that a specific form of cooperation, grounded in we-intentions and we-reasoning, shows the plausibility of the existence of some kinds of irreducible collective goods. Expanding on that view, a refinement of this categorisation of social goods is put forward by underlying the function of some relational entities, such as trust and shared sensemaking processes, in making cooperation robust in uncertain environments. Finally, by applying the taxonomy to collective action gridlocks regarding climate change, digital information, and public education, the consistency of this hypothesis is tested, showing that a pluralistic ontological account of social goods might improve the moral understanding of current social dilemmas. (shrink)

Although stockholders may benefit from information regarding the frequently substantial charitable and political contributions of the corporations they own, US corporations are typically not required to disclose any information about such payments in annual financial statements or information submitted periodically to regulatory agencies. This lack of transparency is confounded by disclosure requirements of private foundations, which a corporation may choose to establish for the purposes of administering charitable giving for the corporation. The resulting disclosure fog engendered by extant regulations may (...) be confusing to those corporation owners who would like to know what corporation contributions are being made to charities and politicians. This article enumerates the magnitude of the charitable and political gifts of 40 of the most generous public corporations in the USA, the current disclosure requirements for public companies, the role of foundations, rationales for withholding relevant information from owners, and ethically questionable strategies that corporations may use to manage those disclosures for their benefit. (shrink)

My aim in this article is twofold. First, I will illuminate the triangular conceptual connections between responsibility, authority, and power as they are exposed in the organizational realm; second, I will show how the three concepts are distinct. Relying on the work of Peter Strawson and his followers on responsibility for my point of departure, I will show that the connection between the inner corporational authority and its inner matching responsibility is different from the connection between the outer corporational forces (...) and influences and the CSR that they develop in reaction to these. This will expose another important distinction between two kinds of responsibility: the organizational kind, as instantiated in organizations, and the social kind, which constitutes the outer aspect of the CSR. Though many thinkers address different kinds of responsibility, a comparative perspective of these different concepts is missing. I attempt to bring three of these separate discourses together to examine them alongside one another, evaluating them in the light of their differences and similarities. This will expose a new typology of ‘responsibility’ that penetrates and illuminates the relations between corporations and society and as such enhance our understanding of organizational responsibility. (shrink)

Ecological objectives in environmental reports usually promise a high degree of environmental responsibilities in a company’s activities. Several studies have already highlighted that most companies do not keep their promises since stakeholders’ expectations and a company’s capabilities for internal adjustments do not always match. Thus, a company might use strategic reporting in order not to endanger its legitimacy. However, no study so far has demonstrated how companies use different legitimacy strategies in reporting their environmental objectives over time. To achieve this (...) in our study, we focus primarily on findings from legitimacy theory in combination with the legitimacy strategies suggested by Lindblom Social and environmental accounting: developing the field, Sage, Los Angeles, pp 51–63, 2010). To test our theoretical framework empirically, we analyze 260 corporate environmental reports of German DAX companies between the years 2000–2014 by coding all disclosed objectives within these reports. Based on this longitudinal approach, we are able to identify reporting patterns of the different companies that provide insights into those companies’ environmental reporting legitimacy strategies. Overall, this study contributes to research on voluntary disclosure by showing that a comprehensive analysis of the reporting pattern of disclosed objectives allows the identification of certain legitimacy strategies. (shrink)

My aim in this article is twofold. First, I will illuminate the triangular conceptual connections between responsibility, authority, and power as they are exposed in the organizational realm; second, I will show how the three concepts are distinct. Relying on the work of Peter Strawson and his followers on responsibility for my point of departure, I will show that the connection between the inner corporational authority and its inner matching responsibility is different from the connection between the outer corporational forces (...) and influences and the CSR that they develop in reaction to these. This will expose another important distinction between two kinds of responsibility: the organizational kind, as instantiated in organizations, and the social kind, which constitutes the outer aspect of the CSR. Though many thinkers address different kinds of responsibility, a comparative perspective of these different concepts is missing. I attempt to bring three of these separate discourses together to examine them alongside one another, evaluating them in the light of their differences and similarities. This will expose a new typology of ‘responsibility’ that penetrates and illuminates the relations between corporations and society and as such enhance our understanding of organizational responsibility. (shrink)

Sustainability managers represent a key stakeholder in implementing and diffusing sustainability initiatives. However, there is a significant gap in the literature examining the impact of greenwashing on sustainability managers. This research examines the effects of greenwashing on sustainability managers' job satisfaction, commitment, turnover intentions, and job performance from a social identity/person–organization (P‐O) fit perspective. Our sample consists of practicing sustainability managers (n = 125) in high‐ (77%) or mid‐level (23%) positions. Results indicate that perceived greenwashing negatively affects the attitudinal outcomes (...) and job performance of sustainability managers. The results also indicate that for sustainability managers whose social responsibility identity is higher than that of their firm, greenwashing has a significant association with lower satisfaction and job performance and higher intentions to leave. However, for managers whose social responsibility identity is lower than that of their firm, employer greenwashing had no effect on the sustainability managers' attitudes, even though they recognized their own poor job performance. The cumulative effect may be a situation in which managers in the best position to enhance a firm's CSR leave the firm, and vice versa. (shrink)

We investigate the effectiveness of corporate social responsibility disclosure in protecting corporate reputation following financial restatements. As expected under legitimacy theory, firms can signal their legitimacy via nonfinancial disclosure after the negative effects of financial restatements. Our results show that restating firms make substantial improvements to overall CSR disclosure quality by changing their standalone reports to a more conservative tone, increasing readability and report length, even though they strategically disclose less forward-looking and sustainability-related content. Such improvements are more pronounced in (...) restating firms with prior low-quality CSR disclosure. Moreover, restating firms with CSR disclosure have smaller forecast errors than non-CSR disclosers, yet the change in CSR disclosure after restatements does not further improve analyst forecast accuracy. Finally, we find that compared with nondisclosers, restating firms with CSR disclosure suffer smaller firm value losses. Overall, the evidence supports the view that consistent CSR reporting alleviates reputational damage and plays an insurance-like or value protection role during crisis periods. (shrink)

This article analyses the determinants associated with the use of the Integrated Report as a corporate reporting model for sustainability information. IRs provide information regarding the use and interdependence of different company resources. The previous literature has identified determinants behind the presentation of IRs at the country level as well as at the company level. Our work contributes to the literature by using a novel statistical approach that addresses the likelihood of the non-independence of data: companies in the same country (...) are more similar to one another than are companies from different countries. Our results confirm significant inter-country variance, which may be partially explained by the existence of specific regulations and the individualism vs. collectivism dimension. Although we confirm the effect of company-level determinants, our results do not support the role of specific variables tested as determinants. (shrink)

The article examines the effects of non-financial disclosure on corporate social responsibility. We conceptualise trade-offs between two ideal types in relation to CSR. Whereas self-regulation is associated with greater flexibility for businesses to develop best practices, it can also lead to complacency if firms feel no external pressure to engage with CSR. In contrast, government regulation is associated with greater stringency around minimum standards, but can also result in rigidity owing to a ‘one-size-fits-all’ approach. Given these potential trade-offs, we ask (...) how mandatory non-financial disclosure has been shaping CSR practices and examine its potential effectiveness as a regulatory instrument. Our analysis of 24 OECD countries using the Asset4 database shows that firms in countries that require non-financial disclosure adopt significantly more CSR activities. However, we also find that NFD regulation does not lead to lower levels of corporate irresponsibility. Furthermore, our analysis demonstrates that, over time, the variation in CSR activities declines as firms adopt increasingly similar practices. Our study thereby contributes to understanding the impact of government regulation on CSR at firm level. We also discuss the limits of mandatory NFD in addressing regulatory trade-offs between stringency and flexibility in the field of corporate social responsibility. (shrink)

The Global Reporting Initiative (GRI) guidelines have emerged as an important instrument used by firms to structure the content of sustainability reporting (SR). This development has led to the question of whether the elaboration of GRI SR is beneficial to a firm’s financial performance. In this study, building on signaling theory, we carry out an empirical investigation of the impact of GRI SR on firm profitability and the factors moderating that impact. Drawing from the China Stock Market and Accounting Research (...) (CSMAR), the WIND Economic, and the Chinese Research Data Services Platform (CNRDS) databases, we identified a sample of 122 listed firms with GRI SR in China. We then employed an event study method to compare the firms following GRI SR with a set of matched firms reporting sustainability without following the GRI guidelines. The results show that GRI SR significantly increases firm profitability. Moreover, firms with local political ties reap more benefits from GRI SR, while the moderating effect of central political ties is not significant. Surprisingly, the performance impact of GRI SR is negatively correlated to the firm’s internationalization level. (shrink)

This study examines the significance of gender-inclusive corporate boards for improving business performance in Pakistan and addresses the social paradox of gender quotas for reducing gender disparities in boardrooms. The conceptual review of all-inclusive literature focuses on assembling descriptive outlines of the evidence explored; analyzing and evaluating it; sieving out inapt studies; and furnishing an aperçu of the authentic evidence. Pakistan’s case for boardroom’s gender diversity merits consideration in the context of kinship, competence, business ethics, and meritocracy. With the legal (...) and regulatory push in the form of the Companies Act, 2017 and SECP’s regulation, companies in Pakistan are liable to induct at least one woman director on corporate boards. The literature portrays the legislative measures as controversial and presented polarized opinions on gender quotas, either in favor or in against the legislations. The research evinces that the overall women representation in the listed companies at KSE-100 index was 7.55% in August 2019 which rose to 11% till March 2020. The paper contributes towards exposing the social paradox of gender-inclusive boardrooms in Pakistan. The findings indicate an urgent need for the implementation of gender parity social reforms to empower competent women with their legal rights to enjoy the stature they deserve. (shrink)

The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, (...) environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability. (shrink)

Building on agency and resource-based view theories, this study investigates the level of environmental disclosure (ED) practices of family versus non-family firms and explores the moderating role of board gender diversity. We test our hypotheses on a 3-year (2018–2020) panel data sample comprising 324 observations of Italian small- and medium-sized enterprises traded on the Euronext Growth Milan. Findings show that, compared to non-family firms, companies with a family firm status are characterized by lower levels of ED. Gender diversity on the (...) board, however, moderates this relationship, reducing this gap, to the extent that the family firm status is associated with higher ED when the number of women directors is high enough to constitute a critical mass. We consequently contribute to the studies on family business, corporate governance, and corporate social responsibility. (shrink)

An important question in the business ethics literature concerns organizational response in the aftermath of an unethical business practice. This study examines factors affecting firms’ decision to take reparative action in the aftermath of an environmental violation. Specifically, we investigate environmental violators’ decision to undertake a Supplemental Environmental Project (SEP), which is an initiative that promotes restorative justice. To settle an environmental violation, the United States’ environmental regulator allows offenders the option of either paying the full penalty or a reduced (...) sum while spending additional effort and engaging in an environmental project. As predicted, we find that firms with poorer past environmental performance and greater shareholder environmental activism are more likely to engage and invest in a SEP. Additionally, there is a stronger association between shareholder activism and SEP investment when firms have poorer past environmental performance. Our findings inform regulators, stakeholders, and business ethics researchers on the factors that lead firms to undertake reparative action following unethical business practices. (shrink)