Examination of Corporate Social Reporting and Financial Performance

Abstract

Organizational leaders around the world spend millions of dollars on ineffective corporate social responsibility (CSR) programs and CSR reporting strategies. Understanding the relationship between CSR reporting, CSR indices (CSRi), and financial performance is necessary to minimize unnecessary expenditures among organizational leaders. The purpose of this quantitative correlational study, grounded in Frederick's CSR theory and Freeman's stakeholder theory, was to examine the relationship between CSR reporting, CSRi, and financial performance of hardware and software organizations. Data were collected from the Security Exchange Commission and the official websites of 25 hardware and software organizations that were part of Fortune 500 between the years 2010-2015. The results of the multiple linear regression indicated that there was no statistically significant relationship between CSR reporting, CSRi, and net income. Similarly, no significant relationship existed between CSR reporting, CSRi, and return on assets. The implications for social change include the development of socially responsible strategies that take into consideration the ethical variables of dignity and respect and the uncertainties faced by individuals within the community.