Financial profiles and the disclosure of expenditures for socially responsible purposes

Mills, Dixie L.; Gardner, Mona J.

doi:10.1016/0148-2963(84)90022-5

Cited by 26 publications

(13 citation statements)

References 13 publications

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“…Firms that are less profitable tend to disclose more information concerning social responsibility to improve the firm's corporate image. The potential theoretical relevance as well as prior empirical findings of the impact of financial performance on environmental disclosure (Cormier and Magnan, 2003;McGuire et al, 1988;Mills and Gardner, 1984;Roberts, 1992) lead us to test moderating roles of financial performance in our model. In so doing, we aim to gain insight as to how stakeholders' influence on environmental disclosure varies according to financial performance.…”

Section: Moderation Analysismentioning

confidence: 98%

“…Alnajjar (2000) has discovered that firms that are less profitable tend to disclose more information concerning social responsibility to improve the firm's corporate image. Conversely, many studies document a positive relationship between a firm's level of disclosure and its financial performance (Cormier and Magnan, 2003;McGuire et al, 1988;Mills and Gardner, 1984;Roberts, 1992). We measure profitability using total return on assets, measured as the ratio of income before extraordinary items and average assets as of fiscal year-end.…”

Section: Econometric Modelmentioning

confidence: 99%

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Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan

2010

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Section: Moderation Analysismentioning

confidence: 98%

Section: Econometric Modelmentioning

confidence: 99%

Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan

2010

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“…Roberts (1992), Richardson and Welker (2001) and Elijido-Ten (2004) Profitability. Many studies document a positive association between a firm"s level of disclosure and its financial performance (Mills and Gardner, 1984;Cochran and Wood, 1984;McGuire, Sundgren and Schneeweis, 1988;Cormier and Magnan, 2003). Firms with superior earnings performance have a higher propensity to reveal their "good news".…”

mentioning

confidence: 99%

The informational contribution of social and environmental disclosures for investors

Cormier

Ledoux

Magnan

2011

Management Decision

308

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Corporations increasingly define their social and environmental initiatives and activities as part of their Corporate Social Responsibility (CSR). Disclosure practices have followed suit as well with social and environmental information typically being combined, often through a CSR report. The emergence of CSR is a response to the demands of activist investors, ethical and green institutional investors as well as rating services (e.g., Jantzi) which evaluate corporations through the lens of CSR, thus going beyond traditional environmental indicators. However, is this trend beneficial to investors? We investigate whether social disclosure and environmental disclosure substitute or complement each other in reducing information asymmetry between managers and investors, taking into account a firm"s environmental performance and governance attributes. Our findings suggest that social disclosure and environmental disclosure substitute each other in reducing stock market asymmetry, as proxied by share price volatility. Our results also show that the reduction in share price volatility is higher for economic (hard) environmental disclosure than for generic (soft) environmental disclosure. Hence, future research in CSR disclosure may fruitfully distinguish between social and environmental disclosures as well as between hard (economic-based) and soft environmental information.Key words: Environmental disclosure, governance attributes, information asymmetry, social disclosure. However, most voluntary disclosure guidelines (e.g., Global Reporting Initiative or GRI)as well as most prior research view corporate social responsibility (CSR) disclosure as an additive process where more is better (e.g., Ingram, 1978;Patten, 1991). In other words, it is assumed that more social and environmental disclosure benefits the disclosing firm as well as its shareholders. There is anecdotal and empirical evidence that, on their own, both social disclosure (e.g. Downing, 1997;Cormier, Aerts, Ledoux and Magnan, 2009) and environmental disclosure (e.g. Cormier, Magnan and Morard, 1993;Barth and McNichols, 1994;Li and McConomy, 1999;Aerts, Cormier and Magnan, 2008) convey value-3 relevant information to investors. However, such evidence is not conducive to the development of efficient disclosure practices since it is likely that there is much overlap in the strategies underlying a firm"s social and environmental actions and performance. Moreover, despite the growth and development of CSR disclosure by many organisations, it is still relatively unknown as to how investors interpret social and environmental disclosures together. Moreover, it is still uncertain as to how investors integrate a firm`s CSR performance into their assessment of CSR disclosure.In this study, we investigate whether social disclosure and environmental disclosure substitute or complement each other in reducing information asymmetry between managers and investors, taking into account a firm"s environmental performance and governance attributes.Our study focuses on a sample...

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“…Many studies document a positive association between a firm's disclosure and its financial performance (Mills and Gardner, 1984;Cochran and Wood, 1984;McGuire et al, 1988;Magnan, 1999, 2003;. For this study profitability is measured as the return on assets and a positive relationship is expected between profitability and performance disclosure.…”

Section: Firms' Financial Conditionmentioning

confidence: 99%

Performance disclosure on the web: an exploration of the impact of managers’ perceptions of stakeholder concerns

Aerts¹,

Cormier²,

Гордон³

et al. 2006

IJDAR

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Abstract. Using an exploratory research perspective, we examine how multinational firms' executives' motivations map into corporate website performance disclosure. Our focus is on managements' beliefs about the relevance of financial, social and environmental performance disclosures and how these beliefs relate to the firm's website disclosure practices. For 56 companies, we use managers' perceptions along with data captured from websites. Employing factor and regression analysis, we find that executives' perceptions of stakeholders' importance affect their firms' web-based disclosure practices and foci. Additionally, strategic focus, media, size of organization, profitability, leverage and analyst following are found influential in explaining types of performance disclosures made.

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Financial profiles and the disclosure of expenditures for socially responsible purposes

Cited by 26 publications

References 13 publications

Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan

Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan

The informational contribution of social and environmental disclosures for investors

Performance disclosure on the web: an exploration of the impact of managers’ perceptions of stakeholder concerns

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