Corporate anti-corruption disclosure

Abstract

Purpose The purpose of this paper is to investigate whether differences in media exposure regarding corporate corruption appear to influence companies’ anti-corruption disclosures. The authors also examine whether the level of press freedom in firms’ home countries affects disclosure and the impact of media exposure in different ways. Design/methodology/approach The authors use Transparency International’s 2012 ratings of anti-corruption disclosure by the 105 largest multinational firms in the world, press freedom assessments from the non-governmental organization Reporters Without Borders, and media exposure measures based on a search using the Dow Jones Factiva database. The authors assess relations using regression analysis controlling for other firm-specific factors potentially impacting disclosure choices. Finally, the authors consider the potential effect of other country-level factors. Findings The results indicate that media exposure, using either an existence or an extensiveness measure, is positively related to differences in sample companies’ anti-corruption disclosures. The authors also find that disclosure is more (less) extensive where home country press freedom is less (more) restricted and that reduced press freedom appears to reduce the impact of media exposure on the disclosure. The authors further document that press freedom levels explain more difference in anti-corruption disclosures than other country-level factors potentially influencing the practice. Research limitations/implications Because the investigation is limited to very large international firms for a single year, the degree to which the findings apply to other companies and time periods cannot be assessed. Further, the authors cannot determine how the findings would hold using an alternative disclosure rating scheme. Finally, the authors do not assess whether differences in the source of media exposure impact the findings. Social implications The findings suggest that, to the extent that improved anti-corruption disclosure reflects greater corporate attention to corruption issues, the media may be a powerful player in addressing this social ill. Unfortunately, the results also indicate that media efforts may not be sufficient to bring about change in locations where the freedom of the press is limited. Further, the results suggest that disclosure appears to be a function of exposure to social and political exposures, and the authors therefore question whether it will actually lead to improved corruption performance. Originality/value The study is the first to consider the impacts of media exposure and press freedom on corporate social disclosures.

Board Directors’ Expertise and Corporate Corruption Disclosure: The Moderating Role of Political Connections

“…As a social watchdog, higher media visibility demonstrates corporation concerns over reputation and social legitimacy, which ultimately shows a firm's commitment to fighting corruption. Our finding supports H5 and is consistent with the prior studies of Islam et al [17], Blanc et al [18] and Islam et al [19]. Islam et al [17], who have also investigated the relationship between bribery disclosure and the media visibility of two European mobile corporations, finding a positive and significant association.…”

“…As an important stakeholder, corporations seek to maintain a positive relationship with the media by providing different sets of information regarding anti-corruption, anti-bribery, financial integrity and diverse CSR initiatives in order to improve the transparency and accountability of their businesses, as well as to provide sustainable corporate governance practices. Blanc et al [18] have found that media exposure has a positive effect on the anti-corruption disclosure of leading global firms, while the power of media exposure is relatively high in places where there are greater levels of press freedom. Islam et al [19] have shown that two Chinese mobile companies produced more anti-bribe disclosures following international concern, which led to global stakeholder pressure to restore their reputations.…”

“…Furthermore, the number of studies continues to grow, in the context of both developed and developing countries [8][9][10][11][12][13][14][15][16]. However, the SMD studies conducted in developing countries have not paid significant attention to the issue of corporate corruption and bribery [17][18][19], and no such study has been undertaken in the Bangladeshi context. As corruption is a global problem that compromises governance, transparency and accountability, it is treated as a cancerous presence within society [20].…”

“…Corruption or bribery can be used to expedite work, create political connections for receiving formal and informal benefits (e.g., tax benefits, licensing, subsidies) and generate monopolistic market positions [19]. Corruption decreases the competitive advantage and opportunities of developing countries due to the limited resources and capabilities these nations have in comparison to more developed countries [18,19,27]. In order to curb corruption, many national and international institutions have developed, and continue to develop, different sets of standards, rules, regulations, codes of conduct, corporate governance policies and whistle blowing policies (e.g., World Bank initiatives, organization for economic cooperation and development (OECD), bribery guidelines, united nations global compact (UNGC) anti-corruption guidelines, global reporting initiative (GRI) sustainability framework, ISO 26000 guidelines, AA 1000 standard and SA 8000 standard).…”

Corporate social responsibility reporting of international oil companies in Nigeria

“…It can be argued that because of their geographical extension, international companies are more likely to face greater social pressures. Blanc et al (2017) state that the higher levels of social and political pressure lead companies to use CSRR as a means of reducing their exposures. Some types of social pressures that international companies face include but are not limited to: peaceful and/or violent protests; criticisms and exposure by media; pressure from non-governmental organisations (NGOs); employee strikes; community demonstrations; and boycott of products (Islam, 2015).…”