Employees, Non-financial Reports and Institutional Arrangements: A Study of Accounts in the Workplace

Abstract

Non-financial reports, such as sustainability, social responsibility and ethical reports, claim to make organizations accountable to a range of stakeholders. Yet, it has been argued that such reports are of limited value in the absence of structures that enable stakeholder response to the information provided and accordingly influence decision-making. The aim of this paper is to assess the materiality of non-financial reports to employees in the light of enterprise-level arrangements where employees potentially impact decision-making. The paper draws on interviews with Danish employee representatives and archival material in organizations that claim to be accountable to a range of stakeholders, including employees, through the preparation of non-financial reports. Denmark is an interesting empirical setting for this study as arrangements such as European works councils, employee board representatives, works councils and shop stewards are widespread and regulated. This paper suggests that, from the perspective of employees, formal reports represent a limited contribution to accountability and that institutional arrangements in the workplace appear more important for this stakeholder group. The paper illustrates that these arrangements are significant vehicles for employees to demand, receive and develop accounts of organizational affairs and that non-financial reports seem insignificant as a basis for pursuing impact on management decision-making.

Determinants and Economic Consequences of Non-financial Disclosure Quality

“…The rising importance of CSR disclosure in practical applications is also reflected in academic research (Dhaliwal, Li, Tsang, & Yang, 2011, 2014Dhaliwal et al, 2012;Johansen, 2010;Nichols & Wieland, 2009;O'Dwyer, Unerman, & Hession, 2005;Plumlee, Brown, & Marshall, 2008;Simnett, Vanstraelen, & Chua, 2009). To date, studies on CSR disclosure have mainly focused on its economic consequences.…”

Stakeholder Inclusion and Accounting for Stakeholders

“…While non‐financial reports have been developed to address the problem of sub‐optimal stakeholder inclusion in organizational decision‐making, claiming to make organizations accountable to a range of stakeholders, these non‐financial accounting reports (such as sustainability, social responsibility and ethical reports) actually are of limited value for stakeholder‐focused decision‐making (Greenwood and Kamoche, ; Riise‐Johansen, ). Our analysis suggests that such limitations arise not from the objectives of the reports themselves, but rather from an overall weakness in the underlying premises by which their production is justified.…”

Relationship between general CSR management practices and the development of internal social responsibility

“…That said, the profuse academic output on sustainability reports has not extended to the relationship between the publication of reports and the actual development of CSR. This output has centered on a wide range of topics, most notably: descriptive studies of different countries and sectors (Gallego, 2005;Furtotti, Mazza, Tibiletti, & Triani, 2017, Clemente et al, 2019Berniak-Woźny & Kawasek, 2020), the problem of verification of the information contained in these documents (Hussey, Kirsop, & Meissen, 2001;Simnett, Vanstraelen, & Chua, 2009;Manetti & Becati, 2009;Boiral, Heras Saizarbitoria, Brotherton, & Bernard 2019), the reasons why companies publish them (Delfgaauw, 2000;Morhardt, Baird, & Freeman, 2002;Willis, 2003), the tools and metrics companies use in their preparation (Wallage, 2000;Hussey, Kirsop & Meissen, 2001;Willis, 2003;Isenmann et al 2007;Marinescu, 2020), the readability of reports (Nilipour, De Silva, & Xuedong, 2020;Smeuninx, De Clerck & Aerts, 2020), the role of stakeholders in their preparation and communication (Johansen, 2010;Manetti, 2011;Fernndez-Feijoo et al, 2014;) and the degree of compliance with standards (Marinescu, 2020).…”