Information disclosure is a common regulatory tool designed to influence business behavior. A belief is that transparency can provoke learning and also positive institutional change by empowering private watchdogs to monitor and pressure business leaders to alter harmful behavior. Beginning in the late 1990s, a private movement emerged that pressured corporations to disclose the identify of their global supplier factories. These activists believed that factory disclosure would lead to greater accountability by corporations for the working conditions under which their products (...) are made, which in time would improve labor practices. In 1995, Nike and Levi-Strauss (Levis) surprised the business community by publishing their supplier lists. This paper describes case studies of Nike and Levis, tracking the evolution from resistance to supply chain transparency through to the decision to be industry leaders in factory disclosure. The paper evaluates the contribution of factory disclosure and proposes that other companies should be urged to move toward supply chain transparency. (shrink)

In this study, we examine investor and firm response to the California Transparency in Supply Chains Act of 2010. The CTSCA requires large retail and manufacturing firms to disclose efforts to eradicate slavery and human trafficking from their supply chains and is a rare example of mandated corporate social responsibility disclosure. Based on a sample of 105 retail companies subject to the CTSCA, we find a significant negative market reaction to the passing of the CTSCA. Furthermore, we find that the (...) reaction is significantly more negative for larger firms and companies facing greater supply chain risks, suggesting that investors place a negative value on exposure to legitimacy threats in the social domain. With respect to company disclosure response, we document relatively high compliance with the legislation, although we also find that the disclosure response appeared to be more symbolic than substantive in nature. Finally, our analysis indicates that both disclosure choice and disclosure extensiveness were significantly higher for the high-supply chain risk companies, suggesting that the response was influenced by concerns with strategic legitimation. Overall, the limited quality of disclosure suggests that, without additional rules and guidance, mandates alone may not lead to meaningful social disclosure. (shrink)

Participation in the political process by the United States public accounting profession often blurs the role of the profession as advocates for the public interest with its role as advocates for its own private interests. In this study, we draw from prior theoretical and empirical work to investigate recent federal political activities of the public accounting profession to shed light on these sometimes contradictory roles. In particular, we investigate ten contemporary regulatory issues of interest to the AICPA. We analyze 36 (...) AICPA legislative advocacy letters related to these issues that were provided to federal policy makers. In addition, we analyze the public accounting profession’s federal lobbying reports that were submitted during this same time period. The analysis allows us to assess the public interest discourse present in the AICPA legislative letters as well as the extent of political action taken by the profession related to these issues based on the profession’s lobbying efforts. Our analyses demonstrate that the profession’s discourse and actions often reflect both public and private interest motivations, allow us to categorize the profession’s advocacy efforts as arising from specific motivations, and show that the profession’s public interest arguments used to advocate for their policy positions change depending upon the specific legislative issue being considered. (shrink)

The recent proliferation of International Accountability Standards (IAS) has attracted significant academic interest, but the extent of their adoption and integration by global firms remains underinvestigated.Capitalizing on institutional theory and the typology of strategic responses to institutional pressures proposed by Oliver (Acad Manage Rev 16(1): 145-179, 1991), this article uses an interpretive research methodology to analyze a sample of MNC practitioners' views regarding IAS, and derive some insights in relation to expected patterns of strategic responses to these new institutional pressures. (...) The article also presents relevant remarks relating to the usefulness of institutional theory in the context of research relating to IAS. The findings suggest patterns of engagement combining elements of both conformity and resistance, although the answers correspond most closely to a decoupling or symbolic conformity strategic response. The findings are fleshed out and their implications delineated/assessed. (shrink)

Normativity is assessed as we evaluate and compare the environmental reporting practices of a sample of French and Canadian companies through the lens of institutional legitimacy. More specifically, we examine how French and Canadian firms changed their reporting practices in reaction to the promulgation of laws and regulations in their respective countries, i.e., the NER and Grenelle II Acts in France, and National Instrument 51-102 and CSA Staff Notice NR 51-333, issued by the Canadian Securities Administrators. The firms’ voluntary disclosures (...) according to GRI guidelines are also investigated. Substantive legitimacy theory is used to explore the level of substantive disclosures provided by Canadian and French firms. The findings reveal that the French parliamentary regime is more successful than the Canadian stock exchange regulation in triggering environmental reporting, and that the GRI combined with local regimes prompts environmental disclosures. Notwithstanding the improvements in environmental reporting under all three regimes, a very low level of substantive disclosure is noted in both countries. (shrink)

DIVAn exploration of law's place in everyday life and the influence of everyday life on the law /div.

Regulatory responses to the business failures of 1998–2001 framed them as a general failure of governance and ethics rather than as firm-specific problems. Among the regulatory responses are Section 406 of Sarbanes–Oxley Act, SEC, and exchange requirements to provide a Code of Ethics. However, institutional pressures surrounding this regulation suggest the potential for symbolic responses and decoupling of response from organizational action. In this article, we examine Codes of Ethics for a stratified sample of 75 U.S. firms across five distinct (...) industries and find that content and language converge across organizations in ways undesired by the regulators, and that language is used to minimize the effects of the Code on constraining organizational behavior. There is, however, a noteworthy exception in the sections of the Codes dedicated the ethics of financial reporting. Although this material still contains legalistic boilerplate information, it does offer concrete guidance and emphatic language pertaining to the need to maintain the integrity of reporting practices. This suggests that the corporate understanding of the source of the failures is one of fraudulent financial reporting. Aside from the matter of financial reporting, the vague and stylized content of the Codes was a predicted response and constitutes a rational response to the regulation. The regulation, however, clearly states the belief that Codes should vary from firm to firm and that individual firms should determine the specific content of a Code. Aside from financial reporting matters, the observed result suggests that regulatory efforts may have failed to instigate corporate change in attitudes toward and enforcement of higher ethical standards by corporate actors. (shrink)

The current study examines the micro-linguistic details of Twitter responses to the whistleblower-initiated publication of the Panama Papers. The leaked documents contained the micro-details of tax avoidance, tax evasion, and wealth accumulation schemes used by business elites, politicians, and government bureaucrats. The public release of the documents on April 4, 2016 resulted in a groundswell of Twitter and other social media activity throughout the world, including 161,036 Spanish-language tweets in the subsequent 5-month period. The findings illustrate that the responses were (...) polyvocal, consisting a collection of overlapping speech genres with varied thematic topics and linguistic styles, as well as differing degrees of calls for action and varying amounts of illocutionary force. The analysis also illustrates that, while the illocutionary force of tweets is somewhat associated with the adoption of a prosaic and vernacular ethical stance as well as with demands for action, these types of voicing behaviors were not present in the majority of the tweets. These results suggest that, while social media platforms are a popular site for collective forms of voicing activities, it is less certain that these collective stakeholder voices necessarily result in forceful accountability demands that spill out of the communication medium and thus serve as an impulse for positive social change. (shrink)

Drawing on stakeholder theory and the concept of enlightened self-interest, we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors’ interests by providing more transparent financial information and avoiding corporate misconduct. Moreover, the relationships between corporate giving, financial information transparency, and corporate misconduct vary significantly according to the firm’s ownership type, which affects the fundamental motivations for corporate philanthropy. In a sample of Chinese publicly listed firms from the 2003–2009 period, we (...) find a positive relationship between corporate giving and financial transparency, and note that the relationship is stronger for non-state-owned enterprises. We also find a significantly negative association between corporate giving and corporate misconduct for non-SOEs, but not for SOEs. Taken together, these findings suggest that responsibility to both stakeholders and shareholders is a vital part of building trust and reputations in China’s non-SOE sector. (shrink)

In 2001, France became one of the few countries to require corporate social responsibility reporting through its Nouvelles Régulations Économiques #2001-420. However, initial compliance with the statute was low, a factor implying the law lacked normativity. In this exploratory study, we attempt to determine whether there is movement toward normativity by examining the change in CSR disclosure from 2004 in comparison to 2010 for a sample of 81 publicly traded French firms. We measure both the space and the quality of (...) CSR disclosures, including in the latter a measure based on informational quality attributes as discussed by the International Accounting Standards Board, the Financial Accounting Standards Board, and the Global Reporting Initiative. We find significant increases in the space allocated to CSR disclosure, as well as some evidence of increased quality; although the informational quality of the disclosures remains quite low and fewer firms are including negative performance information in their reports. Finally, we document that differences in disclosure space and quality in 2004 appeared to be associated with legitimacy-based variables and that those relations remain largely unchanged in 2010. As such, it appears that the NRE’s goals of increased transparency remain unmet. (shrink)