While proponents of sustainability reporting believe in its potential to help corporations be accountable and transparent about their social and environmental impacts, there has been growing criticism asserting that such reporting schemes are utilized primarily as impression management tools. Drawing on Goffman’s self-presentation theory and its frontstage/backstage analogy, we contrast the frontstage sustainability discourse of a sample of large U.S. oil and gas firms to their backstage corporate political activities in the context of the passage of the American-Made Energy and (...) Good Jobs Act, also known as the Arctic National Wildlife Refuge Bill. The ANWR Bill was designed to allow oil exploration within the most sensitive environmental areas in the Refuge and this bill was vigorously debated in the United States Congress in 2005 and 2006. Our results suggest that the firms’ sustainability discourse on environmental stewardship and responsibility contrasts sharply with their less visible but proactive political strategies targeted to facilitate the passage of the ANWR Bill. This study thus contributes to the social and environmental accounting and accountability literature by highlighting the relevance of Goffman’s frontstage/backstage analogy in uncovering and documenting further the deceptive nature of the discourse contained in stand-alone sustainability reports. In addition, it seeks to contribute to the overall understanding of the multifaceted nature of sustainability reporting by placing it in relation to corporate political activities. (shrink)

We study the sources of resistance to change among firms in the Canadian petroleum industry in response to a shift in societal level logics related to corporate environmental performance. Despite challenges to its legitimacy as a result of poor environmental performance, the Canadian petroleum industry was divided as to how to respond, with some members ignoring the concerns and resisting change (i.e., laggards) while others took action to ensure continued legitimacy (i.e., leaders). We examine why organizations within the same institutional (...) field responded differently, delaying the industry response. We found that one population of firms was aligned with increasing pressures from its stakeholders for improved environmental performance, and the other was influenced by local cultural, political, and economic ideals less demanding of environmental actions. Our results reveal that several factors both at the institutional field level and the organizational level affected how these two populations reacted to a changing societal logic. Implications for theory, practice, and future research are discussed. (shrink)

The aim of this paper is to analyze whether a number of firm and industry characteristics, as well as media exposure, are potential determinants of corporate social responsibility (CSR) disclosure practices by Spanish listed firms. Empirical studies have shown that CSR disclosure activism varies across companies, industries, and time (Gray et al., Accounting, Auditing & Accountability Journal 8(2), 47–77, 1995; Journal of Business Finance & Accounting 28(3/4), 327–356, 2001; Hackston and Milne, Accounting, Auditing & Accountability Journal 9(1), 77–108, 1996; Cormier (...) and Magnan, Journal of International Financial Management and Accounting 1(2), 171–195, 2003; Cormier et al., European Accounting Review 14(1), 3–39, 2005), which is usually justified by reference to several theoretical constructs, such as the legitimacy, stakeholder, and agency theories. Our findings evidence that firms with higher CSR ratings present a statistically significant larger size and a higher media exposure, and belong to more environmentally sensitive industries, as compared to firms with lower CSR ratings. However, neither profitability nor leverage seem to explain differences in CSR disclosure practices between Spanish listed firms. The most influential variable for explaining firms’ variation in CSR ratings is media exposure, followed by size and industry. Therefore, it seems that the legitimacy theory, as captured by those variables related to public or social visibility, is the most relevant theory for explaining CSR disclosure practices of Spanish listed firms. (shrink)

Firms engage in corporate social responsibility (CSR) because they consider that some kind of competitive advantage accrues to them. We contend that resource-based perspectives (RBP) are useful to understand why firms engage in CSR activities and disclosure. From a resource-based perspective CSR is seen as providing internal or external benefits, or both. Investments in socially responsible activities may have internal benefits by helping a firm to develop new resources and capabilities which are related namely to know-how and corporate culture. In (...) effect, investing in social responsibility activities and disclosure has important consequences on the creation or depletion of fundamental intangible resources, namely those associated with employees. The external benefits of CSR are related to its effect on corporate reputation. Corporate reputation can be understood as a fundamental intangible resource which can be created or depleted as a consequence of the decisions to engage or not in social responsibility activities and disclosure. Firms with good social responsibility reputation may improve relations with external actors. They may also attract better employees or increase current employees’ motivation, morale, commitment and loyalty to the firm. This article contributes to the understanding of why CSR may be seen as having strategic value for firms and how RBP can be used in such endeavour. (shrink)

Social reporting has become an increasingly important dimension of the corporate social responsibility process. The growing necessity to include the social dimension in reporting practices raises important questions about the nature of social responsibility and its impact on corporate and individual behaviour and performance. The literature has yet to provide a reliable theoretical definition of corporate social responsibility and performance, however. Based on the approach proposed by Simons, we argue that organisational reporting about social responsibility can be viewed as a (...) learning tool in some instances. Under this view the design and implementation of corporate social reporting procedures may lead to individual and organisational dynamic changes that foster organisational performance. Research propositions are then derived from the analysis. (shrink)

Through a qualitative approach, we explore the perspective of 72 CEOs of companies operating in Portugal about the definition of corporate sustainability and its facilitators, and obtain four main findings. First, most CEOs equate CS with the company’s continuity/viability. Second, the relevance ascribed to different stakeholders differs considerably: while more than 50 % of CEOs cited shareholders/profits, and more than 40 % mentioned the natural environment and employees, very few mentioned customers, society, suppliers, the State, or competitors. Third, the management (...) practices considered as most important to develop CS are the organization’s strategic alignment with a long-term orientation, and developing and energizing people within a positive organizational climate characterized by trust and ethics. Fourth, the leadership characteristics and behaviors considered as most important to foster CS are scrutinizing the future and leading people through a mobilizing vision; energizing and developing employees; and leading by example. While the whole picture is largely consistent with the “sustainable strategic management” approach suggested by Stead and Stead and with recent CS integrative approaches, the great majority of CEOs who participate in the study have not embraced such integrative and coevolutive perspectives. (shrink)

Growth in CSR-washing claims in recent decades has been dramatic in numerous academic and activist contexts. The discourse, however, has been fragmented, and still lacks an integrated framework of the conditions necessary for successful CSR-washing. Theorizing successful CSR-washing as the joint occurrence of five conditions, this paper undertakes a literature review of the empirical evidence for and against each condition. The literature review finds that many of the conditions are either highly contingent, rendering CSR-washing as a complex and fragile outcome. (...) This finding runs counter to the dominant perception in the general public, among activists, and among a vocal contingent of academics that successful CSR-washing is rampant. (shrink)

Corporate reporting on climate change is of increasing academic interest but is often considered solely from the firm perspective. This article extends current knowledge by considering how institutional pressures influence the greenhouse gas reporting practices of multinational oil and gas companies. The results show that regulation under the EU emissions trading scheme and reporting according to the global reporting initiative guidelines leads to better quality and more extensive reporting. Although generally adopting proactive climate change strategies, European companies do not have (...) superior GHG reporting practices. Corporate media visibility does not impact GHG reporting practices which may be a reflection of the obscure portrayal of climate change in the print media or the fact that coverage is generally positive. This article adds to the current literature on GHG reporting practices demonstrating that institutional theory along with stakeholder theory and legitimacy theory can give further insights into explaining the GHG reporting practices of multinational companies. (shrink)

The aim of this article is to discuss quantitative content analysis as established in communication sciences as a method for research in business ethics. We argue that communication sciences and business ethics are neighboring disciplines, which allow the transfer of quantitative content analysis from communication sciences to business ethics. Technically, quantitative content analysis can be applied through human as well as software coding. Examples for both applications are provided and discussed. We make reference to the software solutions ‘Leximancer’, ‘Crawdad’, and (...) ‘Wordle’, and examine their suitability and limitations with regard to ethical questions for researching business ethics. We recommend a mixed‐method approach, combining human and software coding. Furthermore, we propose a three‐step process that discusses quantitative content analysis as a method for business ethics, including an ethical research objective, and most importantly, concluding with ethical reasoning and interpretation of the quantitative results. (shrink)

The authors describe the intensity and orientation of the corporate social responsibility reporting in four Spanish industries and explore the relationship that exists between both concepts and an independent measurement of reputation for CSR. The results demonstrate that the CSR reporting is especially relevant and useful in the finance industry. Finance companies report significantly more CSR information than most industries in Spain, and this reporting is more closely linked to their CSRR than the CSR reporting of basic, consumer goods and (...) services industries. (shrink)

Large companies must increasingly satisfy not only the conditions of their formal licences, but also the concerns and expectations of host communities and broader society. This has led to the emergence, particularly in the minerals industry, of the notion of “social licence”, an interdiscursive term whose meaning is rarely interrogated. We use textual analysis to critically investigate the construction of social licence discourse in minerals companies’ sustainable development reports and at a recent industry conference. We find that the texts mystify (...) the nature of agency, and privilege processes that maintain existing power relations. Through their partial accommodation of heterogeneous discourses, the texts downplay tensions and conflicts. We conclude that there is a need to reconceptualise the nature of company–stakeholder relationships through a more collaborative, dialogic and reflexive process, avoiding the binary state implied by the term licence. (shrink)

Family firms are ubiquitous and play a crucial role across all world economies, but how they differ in the disclosure of social and environmental actions from non-family firms has been largely overlooked in the literature. Advancing the discourse on corporate social responsibility reporting, we examine how family influence on a business organization affects CSR reporting. The arguments developed here draw on institutional theory, using a rich body of empirical evidence gathered through a content analysis of the CSR reports of 98 (...) large- and medium-sized Italian firms. The grounded theory analysis informs and contextualizes several differences in the type and content of corporate social responsibility reports of family and non-family firms. Our findings show that in comparison to non-family firms, family firms disseminate a greater variety of CSR reports, are less compliant with CSR standards and place emphasis on different CSR topics. We, thus, contribute to the family business and corporate social responsibility reporting literatures in several ways, offering implications for practice and outlining promising avenues for future research. (shrink)

This experimental study extends prior capital market and environmental accounting research by utilizing the theoretical underpinnings of legitimation through impression management, source credibility bias, perceived trust, and ideology in assessing the influence of discretionary environmental accounting narratives on jurors’ punitive damage award assessments. We utilize mock jurors as environmental stakeholders and find that: jurors in a court case involving corporate environmental malfeasance assess lower punitive damage awards against a firm that provides discretionary disclosure on its website regarding future abatement and (...) control narratives, environmental sensitivity of the firm’s industry moderates the negative relationship between the discretionary disclosure and jurors’ punitive damage award assessments, and juror’s perceived trust toward firm management mediates the prior moderation effect. Further, juror political ideology is found to affect the punitive damage award assessments, with liberal jurors levying comparatively higher awards than conservative jurors. (shrink)

We develop a framework for understanding how lack of clarity in business press coverage of corporate social responsibility functions as a mediated and emergent form of strategic ambiguity. Many stakeholders expect CSR to exhibit clarity, consistency, and discursive closure. But stakeholders also expect CSR to conform to varying degrees of both formal and substantive rationality. These diverse expectations conflict with each other and change over time. A content analysis of press coverage in Denmark suggests that the business media reflect and (...) amplify the ambiguity generated by these shifting demands. We propose that this very public lack of discursive closure provides strategic advantages to CSR stakeholders by rendering the concept of CSR adaptable, resilient, and meaningful to diverse interests. From this perspective, strategic ambiguity emerges from a relational and mediated process, not from the direct intentions of individual stakeholders. Our framework suggests that CSR is best understood not as a clear or consistent agenda, but rather as a forum for sensemaking, diversity of opinion, and debate over the conflicting social norms and expectations attached to corporate activity. (shrink)

This research aims to explore the relationship between corporate governance and CSR: What are the major factors that play a direct role in the establishment of this relationship? How does context and institutional background impact upon the relationship between CSR and Governance? Using in-depth semi-structured interviews from two types of governance systems in three countries over three years, this study has demonstrated that in practice, within different settings, CSR is being used both as a strategy as well as a reaction (...) to different drivers. We call this adaptive governance where governance can be defined as a flexible system of action incorporating strategic and monitoring activities that determines the way a company enacts its responsibilities to its shareholders and stakeholders and which is determined at any given time by the interrelationship of institutional drivers and behavioural norms. Governance systems and their interrelationships with CSR are demonstrated as fluid according to the national and institutional context, economic situation and industry impact. In the eyes of practitioners corporate governance includes both structural and behavioural factors as well as responsibilities and actions towards shareholders and stakeholders. Contextual factors that this research highlights to be important to the incorporation of CSR into governance include the economic environment, national governance system, regulation and soft law, shareholders, national culture, behavioural norms and industry impacts. Hypotheses on the impact of institutional contexts, industry impacts and economic situations on different types of CSR actions are proposed for further research. (shrink)

We conceptualise CSR communication as a process of reciprocal influence between organisations and their audiences. We use an illustrative case study in the form of a conflict between firms and a powerful stakeholder which is played out in a series of 20 press releases over a 2-month period to develop a framework of analysis based on insights from linguistics. It focuses on three aspects of dialogism, namely (i) turn-taking (co-operating in a conversation by responding to the other party), (ii) inter-party (...) moves (the nature and type of interaction characterising a turn, i.e. denial, apology or excuse) and (iii) intertextuality (the intensity and quality of verbal interaction between the parties). We address the question: What is the nature and type of verbal interactions between the parties? First we examine (a) whether the parties verbally interact and then (b) whether the parties listen to each other. We find evidence of dialogism suggesting that CSR communication is an interactive process which has to be understood as a function of the power relations between a firm and a specific stakeholder. Also, we find evidence of intertextuality in press releases by six firms which engage in verbal interaction with the stakeholder. We interpret this as linguistic evidence of isomorphic processes relating to CSR practices resulting from the pressure exerted by a powerful stakeholder. The lack of response by ten firms that fail to issue press releases suggests a strategy of ‘watch-and-wait’ with respect to the outcome of the conflict. (shrink)

This paper investigates potential motivations for late adopting U.S. companies to begin disclosing environmental liability amounts in their financial statements. Based on a review of 10-K reports filed from 1998 through 2012, inclusive, we identified 55 firms initiating environmental liability disclosure over the period, with all but three doing so by 2006. Focusing on the disclosers up through 2006, we argue that the companies may have used the disclosure as a tool of impression management to avoid potential stakeholder mis-estimation of (...) previously undisclosed liability exposures. We first compute tests to identify firms that may have begun the disclosure due to (1) materiality and (2) concerns of having proprietary costs imposed upon them due to changes in their environmental media coverage and environmental performance, and we find very few cases where these explanations might hold. For the remaining companies, we compared their newly disclosed liability amount, on average, with the mean level of environmental liability being disclosed by other firms in the year prior to the sample companies’ initiation, and find that it is significantly smaller, thus supporting our impression management argument. Finally, we find that overall level of environmental liability amounts was consistently decreasing over the time frame examined, suggesting that earlier adoption would have made more sense. However, it may also explain why almost no new firms began disclosing after the mid-2000s. (shrink)

Transparency is a crucial condition to implement a CSR policy based on the reputation mechanism. The central question of this contribution is how a transparency policy ought to be organised in order to enhance the CSR behaviour of companies. Governments endorsing CSR as a new means of governance have different strategies to foster CSR transparency. In this paper we discuss the advantages and disadvantages of two conventional policy strategies: the facilitation policy and the command and control strategy. Using three criteria (...) (efficiency, freedom and virtue) we conclude that both strategies are defective. Most attention is paid to the facilitation strategy since governments nowadays mainly use this. In evaluating this strategy we analyse the Dutch case. As an alternative we introduce a third government policy: the development of a self-regulating sub-system. By construing an analogy with the historical development of corporate financial disclosure, we point out that the vital step in the creation of a self-regulating subsystem is the creation of strong informational intermediate organisations. (shrink)

Some researchers have argued that firms with favorable environmental performance are more likely to provide voluntary environmental disclosure, while others have argued that firms with poor environmental performance are most likely to disclose. The authors propose a curvilinear relation between environmental performance and environmental disclosure that is moderated by visibility. Data were obtained from S&P 500 firms queried by Ceres' Climate Disclosure Project. Results show a U-shaped environmental performance—environmental disclosure relation and a main effect for visibility but no moderating effect (...) for visibility on the U-shaped environmental performance-environmental disclosure relation. The authors discussed the implications of these results for future research and practice. (shrink)

Corporate Social Responsibility (CSR) has existed in name for over 70 years. It is practiced in many countries and it is studied in academia around the world. However, CSR is not a universally adopted concept as it is understood differentially despite increasing pressures for its incorporation into business practices. This lack of a clear definition is complicated by the use of ambiguous terms in the proffered definitions and disputes as to where corporate governance is best addressed by many of the (...) national bodies legislating, mandating, or recommending CSR. This article explores the definitions of CSR as published on the Internet by governments in four countries (United Kingdom (UK), France, the United States, and Canada). We look for a consensus of understanding in an attempt to propose a more universal framework to enhance international adoption and practice of CSR using the triple bottom line. Our results concur with the findings of both national and international bodies and suggest that both within and among the countries in our study there exists no clear definition of the concept of CSR. While there are some similarities, there are substantial differences that must be addressed. We present a number of proposals for a more universal framework to define CSR. (shrink)

The existing literature provides conflicting results on the association between firm performance and corporate social responsibility (CSR) disclosure. This paper empirically examines the effect of firm performance on CSR disclosure in terms of disclosure frequency and quality among Chinese listed firms and the possible mediating effect of corporate ownership on the relationship between firm performance and CSR disclosure. Our findings show that better-performing firms are more likely than worse-performing ones to disclose CSR information and to produce higher quality CSR reports. (...) In addition, the link between firm performance and CSR disclosure is found to be weaker among state-owned enterprises compared with non-state-owned ones. (shrink)

We examine recent evolution in corporate responsibility in the forest industry, an important natural-resource-based industry which is under rapid internationalisation and structural change under challenging financial pressures. We address two recent trends in corporate communication: corporate disclosure, that is the adoption of consistent external reporting standards [namely the Global Reporting Initiative (GRI) ], and the growing awareness of engagement with and impact on local communities through philanthropy, generation of prosperity, communication and the social impact of core activities. This study uses (...) a comparative qualitative case approach to forest industry multinational enterprises (MNEs) based on a combination of secondary (reporting, company newsletters and other documentation) and interview data. Three large-scale multinational forest industry firms, all pursuing different strategies in terms of internationalisation and geographical and product diversification, were chosen for the study: Stora Enso, SCA and Sappi Ltd. Our results show that the overall quality of sustainability reporting has improved in these companies from 2005 to 2009 with the adoption of GRI. However, based on our fourfold categorisation of social impact, the core social impact indicator in GRI (SO1) has been interpreted very differently in these MNEs, and the adoption of GRI has not actually much improved the comparability of the reports or transparency of practices. (shrink)

This paper offers a critique of sustainability reporting and, in particular, a critique of the modern disconnect between the practice of sustainability reporting and what we consider to be the urgent issue of our era: sustaining the life-supporting ecological systems on which humanity and other species depend. Tracing the history of such reporting developments, we identify and isolate the concept of the ‘triple bottom line’ (TBL) as a core and dominant idea that continues to pervade business reporting, and business engagement (...) with sustainability. Incorporating an entity’s economic, environmental and social performance indicators into its management and reporting processes, we argue, has become synonymous with corporate sustainability; in the process, concern for ecology has become sidelined. Moreover, this process has become reinforced and institutionalised through SustainAbility’s biennial benchmarking reports, KPMG’s triennial surveys of practice, initiatives by the accountancy profession and, particularly, the Global Reporting Initiative (GRI)’s sustainability reporting guidelines. We argue that the TBL and the GRI are insufficient conditions for organizations contributing to the sustaining of the Earth’s ecology. Paradoxically, they may reinforce business-as-usual and greater levels of un-sustainability. (shrink)

The study here is a qualitative research based on multiple case studies of banking service providers to analyze the role of corporate social responsibility (CSR) in the definition of the corporate identity of these kinds of organizations. The results show that, although companies increasingly integrate CSR into their business strategies, there are some aspects of its management such as its communication or the measurement of its results that detract from its success. These results have important implications for those managers pursuing (...) an effective management of CSR policies and strategies in their organizations, especially as the information comes from 6 of the biggest and most important banking institutions in a European country, with a declared assets (loans) volume which represents 62.75% of the total assets in the national banking industry, and thus largely representing the possible heterogeneity of the market in terms of company size, location, legal status, and management styles. (shrink)

We analyse managerial discourse in corporate communication (‘CEO-speak’) during a 6-month period following a legitimacy-threatening event in the form of an incident in a German nuclear power plant. As discourses express specific stances expressed by a group of people who share particular beliefs and values, they constitute an important means of restoring organisational legitimacy when social rules and norms have been violated. Using an analytical framework based on legitimacy as a process of reciprocal sense-making and consisting of three levels of (...) analysis which capture the relationship between text and context, we investigate the discourse used by CEOs in their initial and subsequent accounts of the incident. We find that CEOs aim to negotiate a resolution between their initial account and organisational audiences’ incongruent interpretations of the event by adopting an ad hoc normative attitude to stakeholders. This manifests itself in the strategic use of the discourse of stakeholder engagement as a means of signalling change, yet maintaining the status quo. It suggests that CEOs strategically use discourse to manufacture organisational audiences’ consent regarding the continued operation of the nuclear power plant affected by the incident. Our findings contribute to the critical corporate communication literature which regards corporate narrative reporting as a means of consolidating the private interests of corporations, rather than increasing transparency and accountability. (shrink)

This article investigates the effects of firm size, profitability, industry affiliation, and the business cycle on retailer philanthropy. The importance of industry and firm effects on giving was analyzed with regression models using industry-fixed effects as well as firm strategy variables. The analysis included instrumental variables methodology to account for simultaneity in the charitable giving–profits relationship. Data were gathered from the IRS Corporate Statistics of Income Sourcebook, data that provide firm size class measures covering the entire firm size distribution ranging (...) from small retailers up to large multi-national retail firms. Retailer philanthropy was measured as the ratio of charitable contributions to total receipts. Important findings include a cubic relationship between retailer philanthropy and firm size; industry effects stronger than those observed for retail profit; and the absence of business cycle effects. The empirical research relating retail charitable giving to firm attributes including firm size and advertising, industry and business cycle factors are unique in the business ethics literature. Prior studies regarding the importance of industry on charitable giving utilized data across broad sectors of the economy. Firms from different sectors could be expected to differ in philanthropic approach due to differences in public contact as well as differences in public relations exposure. The strong industry effects reported for this sample of exclusively retail firms, with similar public contact, provide strong evidence for the importance of industry in determining firms’ charitable strategies. (shrink)

The political philosopher Hannah Arendt develops several arguments regarding why truthfulness cannot be counted among the political virtues. This article shows that similar arguments apply to lying in business. Based on Hannah Arendt's theory, we distinguish five reasons why lying is a structural temptation to businessmen: business is about action to change the world and therefore businessmen need the capacity to deny current reality; commerce requires successful image-making and liars have the advantage to come up with plausible stories; business communication (...) is more often about opinions than about facts, giving leeway to ignore uncomfortable signals; business increasingly makes use of plans and models, but these techniques foster inflexibility in acknowledging the real facts; and businessmen easily fall prey to self-deception, because one needs to act as if the vision already materializes. The theory is illustrated by a case study of Landis, which grew from a relatively insignificant organization into a large one within a short period of time, but ended with outright lies and bankruptcy. (shrink)

Understanding firms' interfaces with the community has become a familiar strategic concern for both firms and non-profit organizations. However, it is still not clear when different community engagement strategies are appropriate or how such strategies might benefit the firm and community. In this review, we examine when, how and why firms benefit from community engagement strategies through a systematic review of over 200 academic and practitioner knowledge sources on the antecedents and consequences of community engagement strategy. We analytically describe evidence (...) on the rise of the community engagement strategy literature over time, its geographical spread and methodological evolution. A foundational concept underlying many studies is the ' continuum of community engagement'. We build on this continuum to develop a typology of three engagement strategies: transactional, transitional and transformational engagement. By identifying the antecedents and outcomes of the three strategies, we find that the payoffs from engagement are largely longer-term enhanced firm legitimacy, rather than immediate cost-benefit improvements. We use our systematic review to draw implications for future research and managerial practice. (shrink)

There exists increasing pressure for small and medium-sized enterprises (SMEs) to engage in corporate social responsibility (CSR) practices, including social reporting. Curiously in this promotional programme of CSR reporting, the only group whose ideas are not sought in this debate are the SME leaders themselves. The present ethnographic field analysis, based on discussions within entrepreneurs' circles, tends to suggest that the argument for expanding formalisation of CSR to SMEs rests upon several fallacies. It implicitly assumes that an apparent solution for (...) large multinationals can be transposed to SMEs, and it underestimates the drawbacks of bureaucracy. Moreover, many SMEs experience inconsistency between the idealistic CSR communication of some large companies and their actions, especially in the supply chain. The author concludes that reports do not constitute the validation for real CSR, nor the proof of superior ethical behaviour. Formalisation can even be counterproductive. Conversely, the absence of social reporting does not imply that SMEs do not behave responsible. CSR in SMEs needs a specific approach, adapted to the informal nature and entrepreneurial character of the small business. The essence of CSR lies in the implementation of responsible business practices. It lies in the right attitudes, in the corporate culture, not in formalisation. (shrink)

. This paper suggests that most of the FTSE-listed firms in the United Kingdom use corporate environmental policy statements (CEPS) to communicate their strategic intent of what environmental and social targets to attain, and broad guidelines of how they will progressively achieve all the required changes and new developments. In this paper, we link the contents of CEPS of a sample of FTSE-listed firms (from the chemical, pharmaceutical and food industry that are committed to develop business excellence) to the voluntary (...) participation in the environmental benchmarking exercise and the various levels of environmental performance therein. The findings suggest that in contrast to their non-participating counterparts, the strategic focus of the participating firms transcends from simply mitigating any potential damages that their operations might have on the environment to business process reengineering and building new implementation capabilities. However, not all of the participating firms achieved excellence in their environmental performance, the high performing firms outweighed their counterparts on their emphasis on technological competence and competitiveness, and interestingly, the average-performing firms would use the strategic emphasis on social responsibility to compensate for their mediocre technological competence. (shrink)

Corporate, Social, Ethical and Environmental Reporting should ideally discharge the accountability of an organisation to its stakeholders. Voluntary reporting has been characterised by a dearth of neutral and objective information such that the advocates of SEER recommend that it be made compulsory. Their underlying rationale is that legally specified disclosure requirements and enforcement mechanisms will enhance the quality of such reporting. This paper sets out to explore how realistic this scenario actually is, in view of the conflicting interpretations in the (...) literature on this subject. To that end, a survey of the reporting patterns of 78 of the largest Spanish companies between 2001 and 2003 examines the extent of their compliance with the ICAC-2002 standard, which obliged them to make environmental disclosures in their financial statements. The results suggest that progressive and improved regulation could increase the volume and quality of SEER disclosures. They also suggest, however, that persistent non-compliance means that the problems associated with voluntary disclosure still exist. Finally, through an impression management perspective, the study reveals, the diverse strategies, ranging from dismissal to concealment, that are employed by companies to avoid transparency. As regulation improves and enforcement expectations rise, it becomes more difficult to dismiss compulsory reporting norms. As a result, some firms engage in more complex concealment strategies to attain corporate legitimacy, depriving stakeholders of regulatory information. The latter point serves to reconcile apparently contradictory explanations in the literature as to whether legitimacy theory might explain partial compliance with SEER regulation. (shrink)

Corporate social responsibility (CSR) disclosure is becoming increasingly important in practice, yet knowledge about the antecedents of such CSR initiatives is limited. Drawing on faultline theories, we expect that the compositional attributes of top management teams, such as the level of heterogeneity, influence their decisions about CSR disclosure and reporting. Data and a sample from Chinese publicly traded companies are used to examine our hypotheses. Our results demonstrate that a top management team's faultline strength is negatively related to CSR disclosure (...) decisions and CSR report quality. We contribute to the literature about CSR disclosure by offering specific insights, through a micro-level analysis, about how to compose and structure top management teams to advance CSR in emerging economies such as China. Practical implications for managers and policymakers are also discussed. (shrink)

We examine the relation between earnings information content and the use of trust words, such as “character,” “ethics,” and “honest,” in the MD&A section of 10-K. We find that earnings announcements of firms using trust words have lower information content than earnings announcements of firms that do not use trust words. We also find that the value relevance of earnings is lower for firms using trust words than those not using trust words. Further, firms using trust words are more likely (...) to receive a comment letter from the SEC, pay higher audit fees, and have lower corporate social responsibility scores. Overall, our results suggest that firms that use trust words in the 10-K are associated with negative outcomes, and trust words are an inverse measure of trust. (shrink)

Organizational transgressions cause recurring scandals. Often disclosed by whistleblowers, they generate public outrage and force organizations to respond. Recent studies have tried to answer the question: “What happens after a transgression becomes publicly known?” They highlight organizational responses marked by recognition of the transgression, penance and reintegration of the organization. However, that research only deals with transgressions involving illegal organizational practices. This article broadens the field of study to include legal but unethical organizational practices. It is based on the case (...) study of a recent scandal: LuxLeaks (2010–2018). This scandal concerns tax avoidance practices that were advised by the international audit and consulting firm PwC to hundreds of companies and made public by whistleblowers. The case data result from cross-comparisons of several organizational (PwC) and governmental (Luxembourg) communication documents as well as parliamentary, judicial and press documents. The article’s results highlight a legalistic organizational response that is so far under-explored in the literature. This response is marked by a rhetoric of denial, reformism and self-victimization and by judicial retaliation against the whistleblowers. It reveals the paradoxes of “legalization” in contemporary organizations, and its role in the perpetuation of unethical corporate practices. (shrink)

Scholars of stakeholder management have long grappled with the question of how to communicate with stakeholders to enhance cooperation and reduce conflict. We build on insights from the literature on stakeholder dialog to highlight the importance of four elements of firm–stakeholder dialog processes: timing, valence, richness, and topicality of firms’ responses to stakeholder engagements. We demonstrate a link between these elements of the firm–stakeholder dialog process and changes in stakeholder cooperation or conflict with the firm, as well as contingent tradeoffs (...) among them. Specifically, we show that the relative importance of these elements is contingent upon stakeholder type and status. Government actors prioritize richness and topicality over timeliness and valence. Economic actors, by contrast, prioritize timeliness and valence. Civil society stakeholders prioritize timeliness, valence, and topicality over richness. Low-status actors across sectors deprioritize topicality and richness while high-status actors demand attentiveness to all four elements. (shrink)

Business Ethics, the Environment & Responsibility, EarlyView.

Business Ethics: A European Review, EarlyView.

Material information is a core aspect of a firm's governance and reporting activities. If corporate information is material, then the firm has a responsibility to disclose it. Currently, firms must judge information as material largely based on a confusing set of standard setters’ definitions. I analyze the particular conditions laid out by each standard setter and explain the ethical implications that result from materiality judgments made by firms using these varied standards. Importantly, this analysis underscores that regulators, firms, and researchers (...) alike must consider the impact of these implications on the fiduciary duty and promise‐keeping that firms make as well as the potential for unfairness and financial harm to others’ welfare that could result. (shrink)

By measuring the level of CSR communication carried out by hotels located in the Colombian Caribbean region and identifying the main determinant factors influencing this level (including pressure from the different stakeholders), this paper contributes to deepening our understanding of the antecedents of CSR communication in small and medium‐sized enterprises (SMEs) operating in emerging economies and, particularly, in the hotel industry, for which no previous studies on this topic could be uncovered. The results reveal that the level of CSR disclosure (...) is low in the region and that the size of the hotel, the pressure from government agencies, and the age and educational background of the hotel’s top manager have a significant influence on the level of CSR communication. Results indicate a reactive approach to CSR communication confirming the prominent role played by government agencies, thus contributing to gain a richer understanding of institutional influences on CSR in Latin American countries. In terms of practical implications, findings suggest that governments should play a more active role in stimulating CSR communication in emerging countries, particularly in the case of SMEs. (shrink)

We investigate how the selection of assurance topics and the format of their communication influence the credibility perception of sustainability report readers. This is important because misleading communication may discredit ethical sustainability assurance practices. Based on signaling theory and using an experimental approach, we are the first to examine false credibility signals in the context of sustainability assurance. We find that two variables related to sustainability assurance, reference explicitness and assurance depth, jointly influence the assurance signal and the perceived credibility (...) of a sustainability report. Our findings indicate that readers are not at risk of false signaling but can make incorrect interpretations of the assurance signal and might respond negatively to well-intentioned signals. The main implications of our findings are that firms should refrain from increasing reference explicitness and should select only the most material topics. Taken together, our results provide new insights on the unethical practice of false signaling and provide an example of an incorrect signal interpretation by readers. (shrink)

In the years 2009 to 2016, approximately 35% of Standard & Poor’s (S&P) 500 firms had at least one director with a professional background in private, not-for-profit organizations (NGO director). Yet research provides little guidance on what kind of firms are more likely to have NGO directors on their boards, neither do we know these directors’ effects on firm strategic outcomes. Our study examines the above two questions in the context of corporate social responsibility (CSR), taking the lens of resource (...) dependence theory. Results from an analysis of all firms included in the S&P 500 index between 2010 and 2016 show that the number of NGO directors serving on a firm’s board in a certain year is positively related to the extent to which the firm displays poor CSR performance in the prior year. We also find that NGO directors on boards are not associated with immediate improvements in CSR performance; rather, their positive influence on CSR performance takes hold after 3 years. Our findings suggest that whereas NGO directors may potentially be appointed to a firm’s board for legitimization reasons, these directors are associated with enhanced CSR performance in the long term. (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 paper investigates whether and how the disclosure tone of earnings conference calls predicts future stock price crash risk. Using US public firms’ conference call transcripts from 2010 to 2015, we find that firms with less optimistic tone of year-end conference calls experience higher stock price crash risk in the following year. Additional analyses reveal that the predictive power of tone is more pronounced among firms with better information environment and lower managerial equity incentives, suggesting that extrinsic motivations for truthful (...) disclosure partially explain the predictive power of conference call tone. Our results shed light on the long-term information role of conference call tone by exploring the setting of extreme future downside risk, when managers have conflicting incentives either to unethically manipulate disclosure tone to hide bad news or to engage in ethical and truthful communication. (shrink)

This article describes a multilevel theoretical framework that examines the multiple causes of corporate social responsibility (CSR) reporting in the social environment of business. We argue that substantive and/or symbolic reporting flows from individual‐, aggregate‐, organizational‐, and institution‐level phenomena, and is thus a complex outcome of CSR and corporate social performance (CSP). Theoretical lenses range from reinforcement theory at the microlevel to legitimacy and stakeholder theories at the macrolevel, and include a discussion of the emergence of lower‐level CSR‐relevant characteristics to (...) higher level constructs. Our goal is to clarify how this behavior develops from microlevel, mesolevel, and macrolevel processes with a view toward assisting corporations to better enact CSR reporting, and their stakeholders to effectively promote substantive reporting behavior. (shrink)

This article examines why firms engage in Corporate Social Responsibility (CSR). Specifically, it investigates the relationship between a firm's motivation to engage in CSR and the depth of its commitment. I propose that the enduring debate over CSR and financial performance is misaligned, and that scholars should instead focus on the underlying components of CSR engagement. This research sheds light on the motivational antecedents of a firm's engagement in CSR and their effect on CSR commitment. Despite calls for scientific investigation (...) of this linkage, it has received scant attention in the literature. Pursuing this area of research requires the construction of measures of CSR motivation and CSR commitment, as prior work generally lacks objective analysis. I present measures and a research methodology that test hypotheses about how CSR motivation relates to different levels of CSR commitment. The results of this research both validate and challenge current theory. This refined understanding of CSR engagement may enhance firm transparency and accountability to stakeholders. It may reduce the uncertainty in both internal and external assessments of firm CSR and the potential for social and financial impact. (shrink)

Purpose Corporate social responsibility communication on corporate websites have become an emerging trend by firms. Similarly, corporate websites have been used to manage stakeholders’ impressions about the organization. Meanwhile, CSR by firms have been criticized for been a manipulative tactics used by firms. The purpose of this paper therefore is to ascertain how telecommunication companies operating in Ghana communicate CSR on their corporate websites. Design/methodology/approach This study used a qualitative content analysis technique. It also used Bolino et al.’s impression management (...) framework as the conceptual framework. Data were extracted from the websites of four telecommunication companies operating in Ghana. Data were analyzed using thematic analysis techniques. Findings The results show that the companies use impression management in communicating CSR on their corporate websites. Account, assertive impression management; blaring, boasting, defensive impression management; demonstrative impression management; exemplification, favor-rendering, illustrative impression management; ingratiation, other-enhancement, other-focused impression management; self-enhancement, self-focused impression management; and self-promotion tactics are tactics prevalent in the CSR communication of the companies. Actor-to-actor link impression management and other emotional appeal also emerged as some of the impression management tactics used by the companies. Originality/value This provides insights into how organizations use impression management in their CSR communication on their corporate websites. Studies of this nature are limited. Again, studies specifically adapting Bolino et al.’s impression management to study CSR communication on corporate websites are rare. (shrink)

Purpose This paper aims to seek to ascertain the corporate social responsibility information needs of customers of microfinance institutions. It also ascertains their media preferences for CSR disclosure. Design/methodology/approach The study adapted Wilson’s concept of information needs as the conceptual basis of this study. Case study research design was used. The respondents consisted of customers of MFIs in Ghana. Semi-structured interview was used to collect the data. Data were analysed using thematic analysis technique. Findings The study found that the CSR (...) information needs of MFIs’ customers relate to moral disclosure, business survival disclosure, financial and business terms and conditions disclosure, donations disclosure and capacity building and training disclosure. The study also found that family and friends are the most reliable sources of CSR information for MFIs’ customers. Originality/value There is a great deal of literature available on CSR disclosure. However, limited studies have investigated the information needs of customers regarding CSR disclosure. Again, CSR disclosure in the Microfinance sector has received limited attention in the existing literature. This study expanded the existing literature by investigating the CSR information needs of MFIs’ customers. (shrink)

The corporate social responsibility literature recognizes that firms’ existing CSR reputation can serve as a safeguard from the impact of reputation-damaging events on a firm’s social legitimacy. However, the literature has yet to focus on the extent to which CSR activities can help mitigate such damage, post-event. This article examines how a firm’s social actions following a product recall facilitate the recovery of its diminished social legitimacy. We test our predictions using a sample of 197 product recalls involving 168 publicly (...) traded corporations from 1999 to 2009 and demonstrate that the speed of the CSR response, the frequency of CSR activities, and the intensity of CSR activities have a significant effect on firm recovery following crisis. The effects were most pronounced in instances where the magnitude of the recall was most severe. The visibility of the recall has a limited impact on post-event recovery. We discuss our contributions to research on strategic CSR and recovery. (shrink)