Determinants of social and economic reportings

Abstract

Purpose This paper aims to provide new insights on the determinants of social and economic sustainability reportings of multinational enterprises (MNEs) in three Anglo-Saxon countries, mainly Australia, the UK and South Africa, from the perspective of corporate governance, stakeholder and corporate legitimacy. Design/methodology/approach This paper examines stand-alone sustainability reports of 67 large MNEs from three countries available in the Global Reporting Initiative (GRI) website for the period of 2008-2009. It undertakes two distinct methodological approaches: first, principal component analysis (PCA) of GRI guidelines (G3) on social and economic indicators to identify the most appropriate dependent variables, and second, hierarchical multiple regression for the hypotheses testing and finding determinants of respective dependent variables on social and economic reportings. Findings The results from the PCA of GRI guidelines (G3) provide an alternative way of categorizing the social and economic indicators when compared to the categories given by the GRI. Again, the results from hierarchical multiple regression indicate the industry sector as the dominant determinant of social and economic reportings. In particular, the positive, significant association of board independence, assurance and employee performance variables with economic reporting confirms the significant roles of corporate governance, stakeholders and corporate legitimacy in determining economic reporting. The findings also suggest the complementary nature of relevant theories in corporate voluntary disclosures relating to economic performance. However, social reporting shows no such relations, which rather relies more on firm-specific/financial variables of MNEs including firm size and age. Research limitations/implications The sample of this study is limited to two-year periods and large MNEs available in the GRI website with stand-alone sustainability reports only. Practical implications The PCA focuses on most relevant and specific categories of social and economic reportings as opposed to GRI generic categories. The PCA findings also suggest the GRI to contemplate reducing the social and economic indicators for future guidelines. The hierarchical multiple regression results highlight specific areas of emphasis that MNEs should focus on when reporting social and economic information. Originality/value This study adds value to the existing literature on GRI-based social and economic reportings as well as the complementary nature of corporate governance, stakeholders and corporate legitimacy perspectives.

Lean, Green and Clean? Sustainability Reporting in the Logistics Sector

“…More and more organizations try to develop their own social, environmental, and economic indicators in order to measure, improve, and report their sustainability [17]. Sustainable, environmental, social responsibility or social reporting are interchangeably used terms, which in essence refer to the same phenomenon.…”

“…GRI is the best-known framework for voluntary reporting of these components by organizations worldwide [27]. The GRI guidelines are nowadays widely accepted for sustainability disclosure on environmental, social, and economic aspects [17], and are acknowledged as the most trustworthy and useful base for sustainable information disclosure [28,29]. More than 40 countries and regions currently reference the GRI-G4 Guidelines in their policies, with more than 24 stock exchanges and market regulators worldwide referring to the GRI Guidelines [30].…”

“…These obliged externalities often induce stakeholders to increase pressures on organizations, in order to diminish negative impacts and to enlarge positive impacts [44]. The stakeholder theory looks at CSR as a response to substantial pressures from the organization's external environment [17]. As mentioned previously, the response to the demands of the stakeholders is necessary for competitive advantage and business survival [46].…”

“…The legitimacy theory assumes that the organization's operations are desirable, proper or appropriate within certain socially composed systems of norms, values, beliefs, and definitions [32]. The organizations ensure that their activities and performances are accepted by the community [8,17]. They report information on their operations to fulfill the legitimacy gap between social expectations and the organizations operations [17].…”

The Strength of CEOs’Influence on CSR in Chinese listed Companies. New Insights from an Agency Theory Perspective

“…This, to some extent, has forced Chinese companies to observe better labor and CSR practices. In addition, most of the companies in which the CEO holds considerable powers are state-owned and operated enterprises, thus demonstrating the dual role of CEO [11]. Many Chinese companies have adopted the Anglo-American model of corporate governance, which is based upon a power-sharing structure, not only helping to provide necessary checks and balances in terms of power structure but also favoring the inclusion of non-executive directors inboards of governance.…”