Until now, there has been no theoretical foundation that explains why organizations implement whistle-blowing systems. By understanding whistle-blowing systems as an instrument that is desired by society, the legitimacy theory could be transferred to the whistle-blowing concept. A survey of German managers shows that legitimacy theory may be supported. Further insights into legitimacy theory are given by the motivation for the design of the implemented systems. The survey shows that, in particular, the implementation of external whistle-blowing systems is seemingly not (...) driven by desired effectiveness. This supports legitimacy theory, since it reveals that external systems are symbolic rather than substantive systems. However, the results do not hold for internal whistle-blowing systems because the implementation of internal systems is ostensibly driven by power theories. The results are interesting for the planned statutory whistleblower protection as they reveal a partially restrained attitude toward whistle-blowing. Whistle-blowing systems are not effective if management is not convinced of their benefits. (shrink)

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

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

The question whether corporate social responsibility (CSR) initiatives can be transferred to firm performance to achieve sustainable development goals (SDGs) prompted this study to investigate how CSR strategies influence both SDGs and financial performance. A mediated moderating model based on the organizational alignment theory was developed to examine the mediating and moderating roles of organizational structure and corporate governance, respectively. By analyzing the three-year panel data of 1,480 firm-year observations from publicly listed companies in Taiwan, we find that organizational structure (...) mediates the relationship between a firm’s CSR strategy and firm performance consisting of SDG disclosures, sales revenue, net profit, and return on equity. Corporate governance plays a moderating role in the relationship between organizational structure and firm performance. Our objective financial data provide evidence supporting “doing well by doing good.” The proposed organizational alignment model and empirical results enhance the theoretical understanding of the CSR research field. The research findings have several practical implications for business executives to improve a firm’s social and financial performance. (shrink)

Ecological psychology regards culture as a response to the demands of the environment. As rice farming in history has significantly influenced the formation of human cultural consciousness, we investigate how the rice culture of a chairperson’s birthplace affects a firm’s CSR activities. Our main finding reveals a positive and significant correlation between a chairperson’s rice culture and CSR activities. Further analysis demonstrates that this positive relationship is particularly pronounced in private firms and family firms. We also examine the incremental effect (...) of individual management heterogeneity and find that the positive relationship is strengthened when the chairperson has a shorter tenure or higher level of education. Additionally, more developed regions help enhance this positive relationship. To address the endogeneity concerns, we adopt an instrumental variable approach and exogenous event analysis based on chairperson turnover. The results are robust to a set of additional tests. Overall, our findings document the benefits of a chairperson’s rice culture in developing countries like China and reveal how this benefit is priced into CSR performance. (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)

BACKGROUND: In today’s world of increased awareness regarding the concepts of corporate social responsibility (CSR) and corporate governance (CG), many firms in the developed countries consider noncompliance with CSR and CG standards as an important source of risk to their reputations with stakeholders. OBJECTIVE: The aim of this study is to investigate the relationship between the corporate social responsibility disclosure (CSRD) index and corporate factors, namely, board size, board independence, board meetings, CEO duality, a firm’s size, leverage, profitability and age. (...) This is the first known study in the case of Saudi Arabia to use the GRI 4th edition indicators to construct the CSRD index and evaluate Saudi listed firms. Results: The results show that profitability and size factor have positive and significant association with CSR disclosure in listed Saudi firms. While CG characteristics have no impact on CSR disclosure except board independence which has a negative impact. Conclusion: The average of CSRD index among Saudi firms is too low, it is about 11% that means Saudi firms disclose 11% of the information that they have to provide for stockholders according to GRI guidelines. Furthermore, the study concludes that the most polluted sectors “Ener. (shrink)

The advocates of “doing well by doing good” have advised firms to invest in corporate social responsibility (CSR), but firms may get lost on how to invest their limited resources in it since CSR is a complex concept involving many activities and different types of stakeholders. In this work, we draw upon the perspective of stakeholder saliency and the stakeholder resource-based view (SRBV) to propose that stakeholders may have different levels of expectations for CSR and contribute to firm value creation (...) differently. Therefore, firms using different CSR to treat different stakeholders (high CSR variability) will have better financial performance. We further propose that context, in particular media coverage and state ownership, moderates the relationship between CSR variability and firm performance, as stakeholders of highly visible firms and state-owned enterprises (SOEs) may frown upon a discriminate treatment in CSR. Findings based on a sample of 3313 publicly listed firms and 15,324 firm-year observations in China's stock markets during the 2010–2018 period provide good support for our predictions. (shrink)

This paper proposes an empirical assessment of the main factors behind the decision of a corporate sponsor to launch a socially responsible fund. Our analysis is performed on a database that encompasses 414 SR fund creations by 46 corporate sponsors between 1990 and 2012. We provide evidence that economic and human resources slack, leverage, low media coverage and high extra-financial performance of the corporate sponsor contribute to an increase of the probability to propose SR funds. These results lead us to (...) argue that the introduction of such funds goes beyond the economic objective of enlarging the market share of the corporate sponsor. It may thus be seen as a particular strategy in terms of communication and signaling, due to the specific characteristics of SR funds. (shrink)

This study reviews and synthesizes the contemporary business literature that focuses on the role of corporate social responsibility to enhance firm value. The main objective of this review is to proffer a precise understanding of what has already been investigated and the findings of those investigations regarding the value-enhancing capabilities of CSR for public firms. In addition, this review identifies gaps in the existing literature, evaluates inconsistent findings, discusses possible data sources for empirical researchers, and provides direction for exploring other (...) promising avenues in future studies. The thrust of the CSR literature largely acknowledges the value-enhancing capabilities of firms’ social and environmental activities. However, the predominance of inconsistent theoretical grounds in major CSR-benefits-related areas suggests that there is ample room for future research to contribute to the extant literature. Anecdotal evidence, the prevalence of theoretical arguments, and the availability of large cross-sectional firm-level data suggest that future research will enrich the literature by investigating the real insights behind several unanswered questions, by establishing implicit understandings regarding recognized findings, and by developing new theories in this emerging field. (shrink)

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

The main purpose of this paper is to better understand how sustainability rating agencies, through discourse, promote an “ideology of numbers” that ultimately aims to establish a regime of normalization governing social and environmental performance. Drawing on Thompson’s (Ideology and modern culture: Critical social theory in the era of mass communication, 1990 ) modes of operation of ideology, we examine the extent to which, and how, the ideology of numbers is reflected on websites and public documents published by a range (...) of sustainability rating agencies. Our analysis indicates that the ideology of numbers promotes a relatively narrow vision of corporate social and environmental responsibility. That is, it establishes some areas of visibility while leaving in the shadow certain aspects of the ways in which companies fulfill, or fail to meet, their social and environmental responsibilities. The ideology of numbers also exerts power by identifying those companies that are deemed to be worthy of inclusion, or not, in a supposedly socially responsible corporate elite. (shrink)

This study examines the impact of top management team media exposure on corporate social responsibility and the moderating effect of TMT characteristics based on the upper echelons theory and stakeholder theory. Based on the observations of 5,352 firms between 2010 and 2019, multiple regression analysis is conducted to empirically test whether TMT media exposure can promote CSR. TMT media exposure is further divided into paper media and online media to reveal the impact of different types of TMT media exposure on (...) CSR. Some robustness tests are also conducted to strengthen the regression results. The results found that a high level of TMT media exposure promotes social responsibility. In addition, the TMT power and political connections negatively moderate the relationship between TMT media exposure and CSR. The main contribution of this study is to develop a TMT media exposure model to assess the impact of TMT media exposure on CSR, providing a theoretical contribution to the existing literature and enriching the research in the CSR context from the perspective of the TMT characteristic moderating role. (shrink)

ABSTRACTThis article presents the findings of a theoretically driven content analysis of the coverage of corporate social responsibility by Expansión, the leading Spanish business journal, in a 1-year time frame. The goal of the article is to help companies understand how they can take advantage of media coverage of CSR by identifying the major stakeholder groups and CSR issues discussed in business news, the positive/negative/mixed tone of the coverage, and the differences that exist in media CSR discourse depending on the (...) industry under scrutiny. The findings are explained under the salience framework of stakeholder theory. (shrink)

Responsible Artificial Intelligence (RAI) is a subset of the ethics associated with the use of artificial intelligence, which will only increase with the recent advent of new regulatory frameworks. However, if many firms have announced the establishment of AI governance rules, there is currently an important gap in understanding whether and why these announcements are being implemented or remain “decoupled” from operations. We assess how large global firms have so far implemented RAI, and the antecedents to RAI implementation across a (...) wide range of RAI initiatives. We find that the operationalization of RAI practices is scattered across firms, with only a fringe of companies extensively industrializing RAI. Social pressure pushes RAI design (”saying”) rather than implementation but the reverse is true for competitive pressure. AI capabilities as a bundle of data quality AI architecture, and talents are strongly associated with RAI design to scaling. (shrink)

In this study we examine how a firm’s corporate philanthropic behavior may affect its subsequent acquisitions. Drawing upon stakeholder theory, we argue that firms may strategically use philanthropic donations to obtain support or approval from stakeholders so as to advance subsequent acquisitions, suggesting a positive relationship between corporate giving and corporate acquisitions in terms of both acquisition number and value. We further contend that stakeholders’ support for acquisitions would be even more critical for firms with negative or conservative attitudes to (...) external stakeholders. Therefore, it is expected that both negative media coverage and controversial industry sectors will strengthen the positive relationship between corporate giving and subsequent corporate acquisitions. Analyses of publicly listed manufacturing firms in China during 2004–2015 largely support our predictions. This study deepens our understanding about the drivers of corporate giving and highlights its role in corporate acquisitions. (shrink)

This study examines the relationship between corporate social responsibility -related information and the value of financial analysts’ stock recommendations. The information environment in which analysts operate in is affected by CSR-related reports that companies voluntarily issue as well as information that becomes available through third-party analysis and rating institutions. We find an inverse relationship between the value of both upgrade and downgrade revisions and the supply of CSR-related information compiled by third-party institutions, suggesting that CSR-related data are associated with a (...) richer information environment that makes it more challenging for analysts to issue informative recommendations, thereby mitigating their contribution to the price discovery process. We further find that the value of analysts’ recommendation revisions is lower for companies that voluntarily issue CSR-related reports compared to those that do not make such disclosures and that the overall effect of CSR on the informativeness of analysts is stronger in the recent years. Our findings have implications for the evolution of CSR reporting as the incorporation of CSR-related information into market prices legitimizes the relevance of such reports. Furthermore, these findings contribute to our understanding of the role and value of information intermediaries in changing information environments. (shrink)

Corporate social responsibility in developing countries has recently received increasing attention, and scholars have pointed to the strong contextuality of CSR in the respective regions. Regarding the latter, however, sub-Saharan Africa has been scrutinized only marginally by academia. Moreover, empirical research on the impact of the institutional context has been scant, despite its attributed importance for CSR. Our article seeks to fill a part of this research gap by investigating CSR website reporting of 211 companies in seven sub-Saharan countries. The (...) study’s aim is twofold: First, we identify to what extent sub-Saharan companies report on CSR and which contents they disclose. Second, by building on institutional theory, we investigate how the socio-economic and political environments influence CSR reporting. For this purpose, we examine the impact of country-level and company-level determinants. We find that the sample African companies’ CSR efforts focus strongly on local philanthropy and therefore differ substantially from Western CSR approaches. Furthermore, we evidence that GDP and level of governance standard positively affect CSR reporting. Our study contributes to the literature by empirically evidencing the contextuality of CSR in Africa and by explaining how specific country- and company-level determinants contribute to or hamper the development of CSR in developing countries. (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)

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)

This article provides an analysis of the ethical behavior of managers making goodwill impairment decisions following the adoption of the International Financial Reporting Standard 3 on Business Combinations. Replacing the systematic amortization of goodwill with the impairment-only approach has been a highly controversial step. Although the aim of IFRS 3 was to provide users with more value-relevant information regarding the underlying economics of the business, it has been criticized for the potential earnings management inherent in impairment testing. This study is (...) based on a sample of Spanish-listed companies between 2005 and 2011, a period that embraces the economic crisis. After controlling for the underlying economic factors of the firms, the results suggest that managers are exercising discretion in the reporting of goodwill impairment losses, and big bath and smoothing strategies are influencing the decisions, whether or not to impair goodwill and about the magnitude of the impairment. Firm size is an attribute that appears significant in the analysis, suggesting that the cost and complexity of running the impairment test affect managers’ decisions. Additional analyses suggest that the macroeconomic environment influences opportunistic and unethical behaviors. (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)

This study examines the impact of the Chief Executive Officer ’s interlocking, created through serving on other companies’ audit committees and/or boards, on corporate social responsibility performance of the focal company and that of its linked companies. We find that CEO interlocking positively affects CSR performance of both the focal company and its linked companies. Further analysis shows that interlocks created by the CEO enhance CSR performance and in turn the financial performance of both the focal company and its linked (...) companies. Our findings are robust to a battery of analyses, including Heckman’s selection bias correction, propensity score matching, alternative measures of CSR performance, and CEO interlocks. These findings are important to regulators, company management teams, and other stakeholders with an interest in how the social ties of CEOs influence companies’ CSR performance and in the CSR–financial performance nexus. (shrink)

This article examines the effects on cost stickiness of firms’ involvement in corporate social responsibility activities. Cost stickiness represents asymmetric cost behavior whereby the magnitude of cost increases in response to an increase in the activity level is greater than the magnitude of cost decreases with a decrease in the activity level. We hypothesize that CSR involvement requires ongoing investments in value-creating activities; hence, it is difficult to scale down committed resources instantly even when the activity declines. We use two (...) different CSR proxies and find support for the CSR-related cost stickiness hypothesis. We further decompose CSR into strategic and tactical CSR and find that cost stickiness is more pronounced for strategic CSR. Finally, we examine the CSR-related cost behavior pattern across business cycles and find some evidence of cost stickiness during an expansionary phase of the economy and cost anti-stickiness during a recessionary phase but only for the tactical CSR component. (shrink)

Public officials rely on performance data that are self-reported by organizations to evaluate progress on a wide range of prosocial outcomes. Policies that require public disclosure of performance in health care are thought to enable patients to select high-quality providers, which in turn may spur quality improvements as providers seek to protect their reputation or increase economic returns. Drawing on institutional theory that examines how conflicting institutional pressures influence organizational decisions, we theorize how profit orientation may mediate the response of (...) health care providers to disclosure mandates in a public health crisis. We focus on measures of data quality—completeness and accuracy—in self-reported data on COVID-19 status and outcomes generated by thousands of long-term care facilities. Using pooled regressions and a difference-in-differences style design, we find that overall, for-profit and not-for-profit facilities report similarly complete data but that for-profit facilities report less accurate data than their not-for-profit counterparts. Our results suggest that it may be important to incentivize each dimension of data quality separately to address differential institutional pressures that affect reporting practices. (shrink)

This paper investigates the corporate social responsibility (CSR) structures of U.S. listed firms. We find evidence of a general tendency towards CSR specialization with almost three-quarters (73.91%) of these firms focusing on a single CSR dimension. The degree of specialization varies across industries and the single CSR dimension focused on also varies for industries with similar degrees of specialization. We find that firms with higher exposures to CSR concerns, international activities, larger size, and higher financial slack tend to diversify across (...) multiple CSR dimensions. More importantly, we find evidence that diversified CSR structures positively affect a firm’s value relative to a control group before and during the 2008 financial crisis. Our findings have important implications for corporate and portfolio managers, investors, and policy makers. (shrink)

In A Treatise on Virtues and Rewards, Dragonetti advances a theory of action based on rewards for virtues. The idea of rewards, especially of awards, relies on the hypothesis that intrinsic motivations drive the actions of good or virtuous citizens. We apply this theory to virtuous entrepreneurs who voluntarily adopt ethical principles as promoted by a recent Italian law. These firms receive an ethical rating by the Italian Competition Authority and can access a set of economic and non-economic benefits. We (...) survey a sample of 152 private companies with an ER and examine their views on the economic and social motivations and benefits as well as the perceived usefulness of the ER for improving ethical behaviour. An exploratory factor analysis detects four categories of motivation and two categories of benefits, which we use in regression models to test Dragonetti’s theory. Overall, respondents see the ER as an effective tool, except in terms of improving economic performance. We also find that entrepreneurs with lower economic and higher responsiveness motivations attain higher ERs. However, in the respondents’ opinions, the ER is not producing any concrete benefits since we find no relationship between the ER and economic or competitive rewards. These findings have implications for the ICA as well as for private companies. (shrink)

This paper investigates the correlation between the quality of corporate social responsibility disclosure and financial performance. It also investigates the moderating role of chief executive officer power in the relationship between the quality of CSR disclosure and firm value in Chinese listed companies. The evidential research used the up-to-date sample of unbalanced findings for the period of 2014–2020, from the registered Chinese firms in the Shenzhen and Shanghai Stock Exchanges as samples for the study. As a starting point technique, the (...) STATA 15 has been used to test pooled ordinary least squares regression on a sample of Chinese listed companies. We use 1-year lagged regression and two SLS regressions to monitor the potential endogeneity problem. The imbalanced data set was received from the China Stock Market and Accounting Research web page, which is the most significant source of information for Chinese publicly listed firms. Data on CSR information items and media reporting are compiled manually. The findings of the study revealed that there are positive FP consequences for the companies engaged in the quality of CSR disclosure. We also report that higher CEO power negatively enhances the quality of CSR disclosure effect on the FP of FV. The research investigates the impact of CSR disclosure and FP by presenting evidence of the moderating role of CEO power. Therefore, it is suggested that a higher law for CSR engagement and disclosure be implemented in China, and robust measures for the implementation of CEO power, although there are financial advantages to be gained. A key relevance to the empirical quality of CSR disclosure research can be recognized as the moderating role of CEO power in the quality of CSR disclosure, FP, and FV in the context of Chinese study. The findings are robust with the use of an instrumental variable method. (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)

Research on sustainability assurance is still in its beginnings. One of the key questions in this field that also is of the highest practical relevance is concerned with the quality of the assurance process. However, a common understanding of assurance quality and how it should be measured is still missing. We try to close this gap by building on the financial audit literature. We introduce a definition of assurance quality that comprises two key aspects: the depth of the assurance process (...) and the breadth of the assurance statement. Based on prior research, we hypothesize that a firm’s sustainability performance is related to the depth of the assurance process, while the type of the assurance provider, more precisely the affiliation to the accounting profession, is related to the breadth of the assurance statement. Results for a sample of 122 European firms reveal a negative relationship between sustainability performance and assurance process depth as well as between the affiliation to the accounting profession and assurance statement breadth. Thus, we find evidence that poor sustainability performers ask for in-depth assurance services, most likely as a means to enhance their internal sustainability-related processes and systems. Assurance providers that do not belong to the accounting profession in turn are associated with broader assurance statements. (shrink)

Research in the field of management has increasingly focused on strategies and tools related to corporate sustainability. Of the tools examined, codes of ethics have been found to play a primary role. Many studies have investigated the content of such codes, as well as their capacity to condition the behaviour of people within organizations. However, few studies have considered the intrinsic quality of codes of ethics. This study aims to investigate the impact that specific factors—firm size, degree of internationalization and (...) industry effect—can have on the quality of codes of ethics. Based on a sample of 248 listed Italian companies, the results of the empirical analysis show that the quality standard is particularly high in larger companies and in those firms operating in industries in which relationships established with critical stakeholders—and disclosure to those stakeholders—play a crucial role. These results have interesting implications for both researchers and practitioners. (shrink)

Joining voluntary thematic initiatives can be a means for firms to legitimate their business activities. However, a lack of review mechanisms could create incentives for free-riding. This might lead to a lower commitment to the initiative’s principles, and endanger its credibility and its members’ legitimacy benefits. Whether members of voluntary initiatives take advantage of the opportunity to free-ride has not been analyzed empirically so far. To fill this research gap, we investigate from an institutional theory perspective the actual implementation behavior (...) of publicly listed signatories of the United Nations Principles for Responsible Investment (UN PRI) in a difference-in-differences and an event study setting. Our empirical results show that, after signing, UN PRI signatories integrate environmental, social, and governance (ESG) criteria in their business activities significantly more than matched non-signatories from the financial sector, indicating the commitment of the signatories to the UN PRI in general. However, while the initial members show a high commitment to the initiative’s principles by increasing their ESG integration performance substantially, new members signing at a later stage of the initiative perform considerably less, and thus undermine the UN PRI’s credibility. We derive implications for voluntary thematic initiatives to avoid such a development. (shrink)

Corporate social responsibility involvement and disclosure has been becoming increasingly popular among US public firms, including those that qualify as real estate investment trusts. This paper aims to discover the relationship between CSR involvement and potential determinants such as growth opportunities, profitability, visibility, and agency costs. Types of CSR involvement are assessed in terms of environmental, community, and governance disclosures and are quantified using word count from the company’s voluntary disclosure. Our results support the hypothesis that CSR has a strategic (...) element and that REITs have greater CSR involvement when they have greater growth and investment opportunities. When the type of disclosure is broken into subcategories, the results show that not all dimensions of CSR are alike: environmental, community, and governance CSR disclosures appear to be motivated by different sets of incentives and reasons. (shrink)

Firms are central to wealth creation and distribution, but their role in economic inequality in a society remains poorly studied. In this essay, we define and distinguish value distribution from value creation and value appropriation. We identify four value distribution mechanisms that firms engage in and argue that shareholder wealth maximization approach skews the value distribution toward shareholders and top executives, which in turn contributes to rising economic inequalities around the world. We call on organizational scholars to study the value (...) distribution role of firms and its consequences for society, and introduce the articles in this volume of the special issue on economic inequality, business, and society. (shrink)

A unique dataset is exploited to provide insight into the impact of management quality practices on corporate social responsibility for a sample of US manufacturing firms. Our results suggest that MQPs are positively and significantly related to a firm’s CSR rating. This confirms that intangible assets affect corporate outcomes. We also show that superior MQPs matter more in explaining the CSR dimensions that are related directly to the firm’s primary stakeholders.

This study adopts a stakeholder theory framework to examine determinants of social reporting quality and empirically test the ability of the theory to explain disclosure quality in an emerging economy. Using a sample of 246 listed companies and a hand-collected dataset that included 2 years of data based on survey questions reflecting international disclosure trends, we apply an aggregate measure of quality with five facets to a variety of corporate social responsibility areas. The results support the application and demonstrate that (...) measures of stakeholder power, strategic posture, economic resources, firm size, and media visibility are related to social disclosure quality. This paper adds to the scarce evidence on social reporting in Taiwan and provides a useful method for evaluating disclosure quality. It also illustrates the impact of two dominant foreign stakeholder groups on social disclosures in Taiwan: organizational buyers in the global supply chain and listing and social rating agencies in international capital markets. (shrink)

This study explores the relevance of corporate social responsibility (CSR) as an element of the corporate identity of Spanish financial institutions. Specifically, it aims to analyze the CSR actions developed by financial entities through the analysis of all the available information disclosed in their websites. A content analysis applied to 82 banking institutions, followed by different quantitative analyses, reveals the multidimensionality of CSR. Findings show that, while the number of entities institutionalizing CSR values as core elements of their identities is (...) still reduced, most organizations disclose CSR information to construct communicated identities and legitimate behaviours. Besides, these dimensions are classified depending on the stakeholder the action is aimed to, and that entities favour the generation of distinctive identities through the implementation and communication of more visible CSR actions like those involving their customers or the community. In any case, results indicate that organizations with certain characteristics are more likely to construct distinctive identities through CSR activities and to establish ethical and social values within their corporate statements and cultures. (shrink)

The purposes of this study are to investigate whether current corporate social responsibility (CSR) is at the theoretically derived achievable level (hereinafter referred to simply as achievable level), to introduce “CSR inefficiency” as the difference between actual and achievable levels of CSR, and to specify its determinants. We established that the achievable level of CSR activity is determined by a range of keiretsu group, government, sector, and resource factors, and choosing specific activities can affect the priority levels of social contributions. (...) CSR inefficiency is affected by its own factors such as internal management, which are different from those of CSR activity. Our study suggests the importance of the differences between the achievable levels of CSR among firms. For example, firms in machinery, electrical equipment, public utilities, and service industries have greater inefficiency in environmental CSR than the other industries. Conversely, the achievable levels of construction and petroleum and gum industries for environmental CSR are higher. Service firms can achieve higher level of environmental CSR, although their emissions and wastes are not as large as those of manufacturing firms in general. In retail industries, the achievable level of environmental CSR is lowest among all industries, while those for labor issues and social contribution are as high as those of other industries. Public utilities have large CSR inefficiency compared with other industries, while construction, steel and nonferrous metals have small CSR inefficiency. (shrink)

In this paper, we examine how organizations’ impression management evolves in response to rising stakeholder pressures regarding organizations’ corporate responsibility initiatives. We conducted a comparative case study analysis over a period of 13 years for two organizations—Exxon and BP—that took extreme initial stances on climate change. We found that as stakeholder pressures rose, their IM tactics unfolded in four phases: advocating the initial stance, sensegiving to clarify the initial stance, image repairing, and adjusting the stance. Taken together, our analysis of (...) IM over these four phases provides three key insights about the evolution of IM in the face of rising pressures. First, when faced with stakeholder pressures, it seems that organizations do not immediately resort to conforming but tend to give in gradually when pressures increase and start to come from relatively powerful stakeholders. Second, evolution of IM seems to be characterized by path dependence, i.e., even as organizations’ positions evolve, they continue to show their conviction in their initial positions and try to convey that their subsequent positions flow logically from the previous ones. Finally, IM involves navigation between symbolism and substance, and companies tend to strive toward harmonizing their symbolic and substantive actions as stakeholder pressure increases. (shrink)

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

This study examines determinants of retail chains’ corporate social responsibility communication on their web pages. The theoretical foundation for the study is signaling theory, which suggests that firms will communicate about their CSR efforts when this is profitable for them and when such communication makes it possible for outsiders to distinguish good from bad performers. Based on this theory, I develop hypotheses about retail chains’ CSR signaling. The hypotheses are tested in a sample of 208 retail chains in the Norwegian (...) market. As hypothesized, I find that foreign chains, chains using private brands, and vertically integrated chains are more likely to signal, but I find no relationship between pricing and signaling. In further analysis using chains’ CSR memberships and certifications as the measure of signals, only the relationship between organizational form and signaling is replicated. In total, the findings give partial support to signaling theory. (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)

This study investigates the extent to which South African listed corporations voluntarily disclose information on black economic empowerment (BEE) in their annual and sustainability reports using a sample of 75 listed corporations from 2003 to 2009. BEE is a form of socio-economic affirmative action championed by the African National Congress (ANC)-led government to address historical imbalances in business participation and ownership in South Africa. We find that block ownership and institutional ownership are negatively associated with the extent of BEE disclosures, (...) whereas government ownership, board diversity (age, education, ethnicity, nationality and occupation), board size and non-executive directors are positively related to the extent of BEE disclosures. By contrast, dual board leadership structure and gender diversity are not significantly associated with BEE disclosures. Our results are robust when controlling for firm-level characteristics, fixed-effects and alternative disclosure proxies. Our results are largely consistent with the predictions of agency, legitimacy, resource dependence and stakeholder theories. (shrink)

The purpose of this study is to explore the extent and nature of sustainability disclosure practices of companies from environmentally sensitive industries in India. It further investigates the influence of potential determinants on sustainability information disclosure of the companies. The study analyzed the data of 57 energy and mining companies included in NIFTY500 index at National Stock Exchange of India (NSE) for the period 2016 to 2019. In the present study, environment, social, and governance (ESG) parameters were considered to measure (...) the corporate sustainability disclosure practices. Panel data analysis was conducted to investigate the impact of possible determinants on sustainability reporting. The results indicate that variables, such as firm size, market capitalization, and a standalone sustainability reporting, are positively associated with the sustainability information disclosure of companies. The finding also suggests that policymakers should promote a standalone sustainability reporting based on Global Reporting Initiative (GRI) standards and also broaden the existing scope of business responsibility reporting in India. Overall findings should help the policymakers and regulators to assess and advance the disclosure reforms to improve sustainability reporting in India. (shrink)

In this paper, we identify and discuss how sustainability reporting has spread throughout the Australian business community over the past twenty years or so. We identified all Australian business organisations that have produced a sustainability report since 1995, and we undertook an interview survey with managers of reporting companies. By incorporating a wide range and large number of reporting companies, we offer insights beyond those obtained from traditional report content analysis and from close analyses of singular case-study organisations. We reveal (...) that sustainability reporting has deepened in a few high-impact industries, and it has spread to a small number of firms in a wide range of low-impact industries. We tested whether there were any relationships between the drivers of reporting and the experiences of different types of reporting firms. Many of the relationships we observed were not as clear or as consistent as expected. Sustainability reporting is, however, of strategic importance to reporting companies. Given the small number of reporters in Australia, we raise the possibility of strategic differentiation as a key driver of reporting behaviour and suggest further studies to explore institutional fields that may be shaping sustainability reporting practice. (shrink)

This study investigates whether and to what extent publicly listed corporations voluntarily comply with and disclose recommended good corporate governance practices, and distinctively examines whether the observed cross-sectional differences in such CG disclosures can be explained by ownership and board mechanisms with specific focus on Saudi Arabia. The study’s results suggest that corporations with larger boards, a Big 4 auditor, higher government ownership, a CG committee, and higher institutional ownership disclose considerably more than those that are not. By contrast, the (...) study finds that an increase in block ownership significantly reduces CG disclosure. The study’s results are generally robust to a number of econometric models that control for different types of disclosure indices, firm-specific characteristics, and firm-level fixed effects. The study’s results have important implications for policy makers, practitioners, and regulatory authorities, especially those in developing countries across the globe. (shrink)