Under what conditions is mandatory disclosure most likely to cause organisational change?

Abstract

Purpose The purpose of this paper is to reflect on how mandatory sustainability accounts can be designed to maximise the likelihood of moving society towards sustainability. Design/methodology/approach The authors use institutional theory to show that organisations are constrained by institutions. Sustainability accounts can drive change by providing information that changes the institutional mix of pressures on organisations. Findings Mandatory disclosure is most likely to drive change when: indicators are appropriate for information intermediaries or other intended users; information is provided at the appropriate level of aggregation; data are comparable to external benchmarks and/or other corporations; there exists a linkage to network of other relevant information; and sufficient popular and political support exists. Practical implications Social changes will only come about if users receive information relevant to their goals and are able to translate it into political action. Corporate-level reporting may not be the best mechanism for this, because many users are interested in issues-based information. In many instances, due to the ability to facilitate greater comparability, a database mechanism is likely to be more helpful. Social and environmental accounting research should consider adopting more site-based reporting, ascertain what sustainability information governments already collect, determine what information NGOs need for campaigning purposes, and theorise how to create and link a nexus of accounts. Originality/value While many studies have called for improved practice and lamented the impotence of reporting, few studies have explored this link from a theoretical perspective.

Pushing the limits of accountability: big data analytics containing and controlling COVID-19 in South Korea

“…Hence, this surveillant assemblage harnessed both public and private information to enforce accountability. Within the social and environmental accounting literature, despite its implicit assumption, no single set of information can produce corporate sustainability reports: rather they are produced from both private and public databases (Leong and Hazelton, 2019).…”

“…Alawattage et al, 2019). As BDA exploits information from multiple data-bases rather than from a single set of information, which is implicitly assumed within the social and environmental accounting literature (Leong and Hazelton, 2019), a new setting is created for giving and demanding reasons for one's conduct. So, we consulted the literature to understand how BDA is pushing the limits of accountability and then the related issue of privacy.…”

Executive remuneration and the limits of disclosure as an instrument of corporate governance

“…He recommends that 'corporate reporting should increasingly be … a matter of negotiation between investors and companies, with an eye on key performance indicators, rather than the subject of one-size-fits-all regulatory prescription.' Leong and Hazelton (2019) likewise argue that 'making disclosure mandatory in and of itself will not help drive desired social changes', which 'will only be driven if users … receive information relevant to their goals and are able to translate it into political action. '…”

The Many Merits and Some Limits of Social Accounting

“…It is (or it should be) instead a means to improve the sustainability performance of the firm. This is the question that Leong and Hazelton ( 2019 ) explore in two cases of social reporting regulations adopted in different contexts. They conclude that regulation can improve social reports, but that this improvement in itself will not necessarily lead to more sustainable operations.…”

“…We may end up having simply more information and scarce change. For substantive change to happen, Leong and Hazelton ( 2019 ) give some propositions. For instance, they suggest rules that facilitate the involvement of “information intermediaries,” that is, civil society organizations that have time and resources to understand the information released and act on it.…”