Corporate sustainability reports are supposed to provide a complete and balanced picture of corporate sustainability performance. They are, however, usually voluntary and thus prone to interpretation and even greenwashing tendencies. To overcome this problem, the Global Reporting Initiative (GRI) provides standardized reporting guidelines challenging companies to report positive and negative aspects of an organization’s sustainability performance. However, the reporting of “negative aspects” in particular can endanger corporate legitimacy if perceived by the stakeholders as not being in line with societal norms (...) and values. Starting from the theoretical lenses of economics-based disclosure theories and socio-political theories of disclosure, the focus of this study therefore was to analyze the communicative legitimation strategies companies use to report “negative aspects,” i.e., negative ecological and social impact caused by corporate activity. Using qualitative content analysis of GRI-oriented sustainability reports from companies listed on the US Dow Jones Industrial Average Index and on the German DAX Index, we identified six legitimation strategies. We discuss these strategies regarding to symbolic and substantial management of legitimacy. We show that symbolic legitimation strategies aiming at modifying the perception of legitimizing stakeholders dominate in the reports at hand. Such persuasion, however, does not meet the requirement of impartiality as postulated by the GRI guidelines. Building upon this conclusion we propose a concise characterization of “negative aspects” and develop a GRI-compliant schema of reporting about them. In doing so, we offer a way to improve the overall “balance” of sustainability reporting contributing to a true and fair view in sustainability disclosure. (shrink)

In this article we explore how multinational corporations (MNCs) adopt assurance practices to develop and sustain organizational accountability for sustainability. Using a panel of Fortune Global 250 firms over a period of 10 years, we document the diffusion patterns of third-party assurance of sustainability reports. We specifically investigate how evolving auditing practices, namely diversity of assurance standards and type of assurance providers, shape the quality of sustainability assurance statements. The results illustrate great variability in the adoption of assurance practices in (...) the formative stages of this novel market. Our descriptive analysis indicates the relevance of external institutional pressure as well as internal resources and capabilities as underlying factors driving the adoption of assurance. Our evidence also suggests that several MNCs project a decoupled or symbolic image of accountability through assurance, thereby undermining the credibility of these verification practices. The paper contributes to the emerging literature on international accountability standards and emphasizes the need to enhance theory-based, cross-disciplinary knowledge related to auditing and accountability processes for sustainability. (shrink)

This paper examines stakeholder responses to impression management tactics used by firms that express environmental commitment. We inductively analyzed data from 98 open-ended questionnaires and identified two impression management tactics that led respondents to believe that a firm was credible in its commitment to the natural environment. Approximately, half of the respondents responded to illustrative impression management tactics that provide images of, and/or broad-brush comments about, the firm's commitment to the natural environment. The other half responded to demonstrative impression management (...) tactics, which provide specific facts and details about the firm's operations. The research results provide important insights into the effects of organizational transparency. In this paper, we explore these findings and provide directions for future research. (shrink)

This paper examines stakeholder responses to impression management tactics used by firms that express environmental commitment. We inductively analyzed data from 98 open-ended questionnaires and identified two impression management tactics that led respondents to believe that a firm was credible in its commitment to the natural environment. Approximately, half of the respondents responded to illustrative impression management tactics that provide images of, and/or broad-brush comments about, the firm’s commitment to the natural environment. The other half responded to demonstrative impression management (...) tactics, which provide specific facts and details about the firm’s operations. The research results provide important insights into the effects of organizational transparency. In this paper, we explore these findings and provide directions for future research. (shrink)

Stakeholder theories propose that managers are responsible not only for maximizing shareholder value, but also for taking into account the well being of other parties affected by corporate decisions. While the language of stakeholder theory has been taken up in industries like mining, controversy remains. Disagreements arise not only about the apportionment of costs and benefits among stakeholders, but about who counts as a stakeholder and about how "costs" and "benefits" are to be conceived. This paper investigates these questions empirically (...) by examining how managers in one mining company talk about corporate responsibilities and by analysing the explicit and implicit values systems and moral logics which inform this talk. The investigations discovered that while some claims by stakeholder groups were readily accommodated by managers, others were not. Analysis of the value frameworks employed by the mangers confirms the views of leading stakeholder theorists that stakeholder theory is grounded in the realities of management practice and behaviour. (shrink)

There is a growing realisation that the current upward trend in levels of disclosure of social, ethical and environmental performance by corporations and other organisations is not being accompanied by simultaneous greater levels of public trust. Low levels of confidence in the information communicated in public reporting is probably undermining the impetus for this disclosure. This article suggests that this credibility gap can be narrowed through the use of third party independent assurance. However, this is not an unqualified panacea. Much (...) verification and assurance practice itself has to date been of questionable robustness, reliability and consistency, and has been framed by financial assurance models that are inadequate for the broader, qualitative dimensions of social, ethical and environmental performance. The paper argues that there is need for a universal standard for the provision of assurance of social, ethical and environmental reporting, and indeed for the credibility of the assurance providers themselves. The new AA1000S Assurance Standard, developed by the Institute of Social and Ethical AccountAbility, offers an approach and a tool for addressing these gaps. (shrink)

Stakeholder Theory combines the pursuance of business goals and responsibility toward a firm's stakeholders. Despite the wealth of research on Stakeholder Orientation, we still have much to learn about specific measurements for several related constructs. In this study, we draw on two samples of 129 and 151 Spanish firms, respectively, to investigate CEOs' perceptions on Stakeholder Integration (SI), leading to the identification of three dimensions of the construct. In this respect, our study suggests that Knowledge of Stakeholders, Interactions between a (...) firm and its stakeholders, and the adaptation of a firm's behavior to stakeholders' demands constitute the main dimensions of SI. This construct has the potential to connect the stakeholder and strategy literatures. (shrink)

Stakeholder Theory combines the pursuance of business goals and responsibility toward a firm’s stakeholders. Despite the wealth of research on Stakeholder Orientation, we still have much to learn about specific measurements for several related constructs. In this study, we draw on two samples of 129 and 151 Spanish firms, respectively, to investigate CEOs’ perceptions on Stakeholder Integration (SI), leading to the identification of three dimensions of the construct. In this respect, our study suggests that Knowledge of Stakeholders, Interactions between a (...) firm and its stakeholders, and the adaptation of a firm’s behavior to stakeholders’ demands constitute the main dimensions of SI. This construct has the potential to connect the stakeholder and strategy literatures. (shrink)