The practitioner's perspective on non-financial reporting

California Management Review

Volumn 48, Issue 2, 2006, Pages

  Perrini, Francesco ^a  

^a BOCCONI UNIVERSITY   (Italy)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33645501426     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41166339     Document Type: Conference Paper

References (75)

1. For an overview concerning the relationship between corporate social responsibility policies and practices and corporate economic and financial performance see Joshua D. Margolis and James P. Walsh, "Misery Loves Companies: Rethinking Social Initiatives by Business," Administrative Science Quarterly, 48/2 (June 2003): 268-305. Margolis and Walsh counted 127 studies devoted to exploring the business case for corporate social responsibility in the period 1972-2002. Their results are somewhat puzzling: in spite of the fact that the majority of inquiries found a significant positive relationship, conflicting results were reported even in cases based on the same sample of firms. As a consequence, the relationship should be recognized as ambiguous, complex, and nuanced, not allowing for much theoretical generalization on the strategic implications of responsible business conduct.
2. See also David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (Washington, D.C.: Brookings Institution Press, 2005).
3. Jeffrey L. Cummings and Jonathan P. Doh, "Identifying Who Matters: Mapping Key Players in Multiple Environments," California Management Review, 42/2 (Winter 2000): 83-104.
4. James E. Post, Lee E. Preston, and Sybille S. Sachs, "Managing the Extended Enterprise: The New Stakeholder View," California Management Review, 45/1 (Fall 2002): 6-28;
5. James E. Post, Lee E. Preston, and Sybille Sauter-Sachs, Redefining the Corporation: Stakeholder Management and Organizational Wealth (Stanford, CA: Stanford University Press, 2002);
6. Lee E. Preston and James E. Post, Private Management and Public Policy: the Principle of Public Responsibility (Englewood Cliffs, NJ: Prentice Hall, 1975);
7. Robert W. Ackerman, The Social Challenge to Business (Cambridge, MA: Harvard University Press, 1975).
8. Aaron Chatterji and David Levine, "Breaking Down the Wall of Codes: Evaluating NonFinancial Performance Measurement," California Management Review, 48/2 (Winter 2005);
9. Craig Deegan, Michela Rankin, and John Tobin, "An Examination of the Corporate Social and Environmental Disclosure of BHP from 1983-1997: A Test of Legitimacy Theory," Accounting. Auditing & Accountability Journal, 15/3 (2002): 312-343.
10. R. Edward Freeman, Strategic Management: A Stakeholder Approach (Boston, MA: Pitman, 1984);
11. Thomas Donaldson and Lee E. Preston, "The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications," Academy of Management Review, 20/1 (January 1995): 65-91;
12. Max B.E. Clarkson, "A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance," Academy of Management Review, 20/1 (January 1995): 92-117;
13. Abagail McWilliams and Donald Siegel, "Corporate Social Responsibility: A Theory of the Firm Perspective," Academy of Management Review, 26/1 (January 2001): 117-127.
14. For further information, see the web site of E.Capital Partners S.p.A., 〈www.ecpartners.com〉.
15. In order to have some ideas of the current dimension of corporate reporting' phenomenon, see, among others. Ans Kolk, "Trends in Sustainability Reporting by the Fortune Global 250," Business Strategy and the Environment, 12 (2003): 279-291;
16. KPMG, International Survey on Sustainability Reporting, 2002;
17. SustainAbility, Risk a - Opportunity, Best Practice in Non-financial Reporting, London, 2004, 〈www.accountability.com〉.
18. David Vogel, "The Study of Social Issues in Management: A Critical Appraisal," California Management Review, 28/2 (Winter 1986): 142-151.
19. Simon Zadek, "Mapping Instrument for Corporate Social Responsibility," EC, Directorate General for Employment and Social Affairs, 2002, 〈http://europa.eu.int/comm/employment_social/publications/2004/ kel103002_en.pdf〉;
20. Antonio Tencati, Francesco Perrini, and Stefano Pogutz, "New Tools to Foster Corporate Socially Responsible Behavior," Journal of Business Ethics, 53 (2004): 173-190.
21. Thomas Donaldson, "Defining the Value of Doing Good Business," Financial Times, June 2, 2005.
22. Barney G. Glaser and Anselm L. Strauss, The Discovery of Grounded Theory: Strategies of Qualitative Research (London: Wiedenfeld and Nicholson, 1967);
23. Kathleen M. Eisenhardt, "Building Theories from Case Study Research," Academy of Management Review, 14/4 (October 1989): 532-550.
24. Marc Epstein, Eric Flamholtz, and John J. McDonough, "Corporate Social Accounting in the United States of America: State of the Art and Future Prospects," Accounting, Organizations and Society, 1/1 (1976): 23-42;
25. Lee E. Preston, "Research on Corporate Social Reporting: Directions for Development," Accounting, Organizations and Society, 6/3 (1981): 255-262;
26. J.E. Guthrie and L.D. Parker, "Corporate Social Disclosure Practices: A Comparative Interna tional Analysis," Advances in Public Interest Accounting, 3 (1990): 159-176;
27. Mikael Niskala and Michael Pretes, "Environmental Reporting in Finland: A Note on the Use of Annual Reports," Accounting, Organizations and Society, 20/6 (1995): 457-466;
28. Rob Gray, Reza Kouhy, and Simon Lavers, "Methodological Themes: Constructing a Research Database of Social and Environmental Reporting by UK Companies," Accounting, Auditing & Accountability Journal, 8/2 (1995): 78-101;
29. Carol A. Adams, "Internal Organizational Factors Influencing Corporate Social and Ethical Reporting: Beyond Current Theorising," Accounting, Auditing & Accountability Journal, 15/2 (2002): 223-250.
30. Robin W. Roberts, "Determinants of Corporate Social Responsibility Disclosure: An Application of Stakeholder Theory," Accounting, Organization and Society, 17/6 (1992): 595-612.
31. Scott S. Cowen, Linda B. Ferreri, and Lee D. Parker, "The Impact of Corporate Characteristics on Social Responsibility Disclosure: A Typology and Frequency-Based Analysis," Accounting, Organization and Society, 12/2 (1987): 111-122;
32. Robin W. Roberts, "Determinants of Corporate Social Responsibility Disclosure: An Application of Stakeholder Theory," Accounting, Organizations and Society, 17/6 (1992): 595-612;
33. Adams, Accounting, Organizations and Society Op. Cit.;
34. Dennis M. Patten, "The Relation Between Environmental Performance and Environmental Disclosure: A Research Note," Accounting, Organizations and Society, 27 (2002): 763-773.
35. Appendix 1 lists all the companies included in the sample. Each company has only one type of reporting document.
36. The Triple Bottom Line approach has been developed since the Nineties and with reference to the measurement of CSR. This perspective refers to the contemporary evaluation of the economic, social, and environmental corporate dimension, and it can be considered in line with the EU definition of CSR and sustainable development. John Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (Oxford: Capstone Publishing, 1997);
37. Wayne Norman and Chris MacDonald, "Getting to the Bottom of "Triple Bottom Line," Business Ethics Quarterly, 14/2 (2004): 243-262.
38. The Global Reporting Initiative (GRI) is a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organizations for reporting on the economic, environmental, and social dimensions of their activities, products, and services, 〈www.globalreporting.org/〉, AccountAbility Framework.
39. M. Joseph Sirgy, "Measuring Corporate Performance by Building on the Stakeholders Model of Business Ethics," Journal of Business Ethics, 35 (2002): 143-162.
40. Jane Fiona Gumming, "Engaging Stakeholders in Corporate Accountability Programmes: A Cross-Sectoral Analysis of UK and Transnational Experience," Business Ethics: A European Review, 10/1 (2001): 45-52.
41. With specific regards to the relationship between companies and activists, Paul A. Argenti, "Collaborating with Activists: How Starbucks Works with NGOs," California Management Review, 4711 (Fall, 2004) : 91-116.
42. Argenti argues the tendency of companies towards collaboration as a win-win strategy. In line with the "involve me" culture, the author notes how "through carefully developed partnerships, each party can move beyond their respective organizational constraints to achieve results that exceed what each can accomplish individually." [p. 107.] The role of stakeholder engagement within the CSR paradigm has also been recently enlightened by Sandra Waddock and Charles Bodwell, "Managing Responsibility: What Can Be Learned from the Quality Movement?" California Management Review, 47/1 (Fall 2004): 25-37.
43. Dennis A. Rondinelli and Michael A. Berry, "Environmental Citizenship in Multinational Corporations: Social Responsibility and Sustainable Development," European Management Journal, 18/1 (2000): 70-84.
44. The recording instrument has been drawn on a set of key CSR performance indicators-the Social Statement - that represents the core of the "Corporate Social Responsibility-Social Commitment (CSR-SC) Project," promoted by the Italian Government to give a tangible contribution to the "CSR promoting campaign developed at the European level." The instrument follows a CSR stakeholder management model and triple bottom line approach as well. In fact, its goal is to provide guidance and reference points on key issues of the CSR agenda, by stakeholder. In particular the Social Statement is a document that maps stakeholder-based CSR performance indicators, through which enterprises' process of social, environmental, and economic performance evaluation can be voluntarily supported and enhanced. In fact, the tool specifically aims at supporting the process of systematic social and environmental data collection and self-evaluation. This process was not meant to replace public or private "acknowledged" initiatives on CSR, but rather to be a supplement to these projects. In other words, the set of indicators aims at monitoring the commitment and the activities carried out by enterprises within the subject of CSR, helping them to communicate to their stakeholders regularly and accurately. The Italian Ministry's Project is downloadable from the web site: 〈www.welfare.gov.it/CSR〉.
45. In line with what emerges from the content analysis, we chose to focus on the environment as a stakeholder per se, in that it is influenced by company operations just as other stakeholders are. In other words, reports in our sample view the environment as a stakeholder in the same sense as the other stakeholders in the list (e.g., human resources or customers), gathering in an environment-based section all data and information concerning environmental protection and company impacts and effects on the environment per se.
46. Post, Preston, and Sybille, European Management Journal op. cit., p. 9.
47. R. Verrecchia, "Discretionary Disclosure," Journal of Accounting and Economics, 5/3 (December 1983): 179-194.
48. McWilliams and Siegel, Journal of Accounting and Economics op. cit.
49. See William C. Frederick, "The Growing Concern over Business Responsibility," California Management Review, 2/4 (Summer 1960): 54.
50. The importance of reciprocal relations with reference to the supply chain is underlined by Mari Meel and Maksim Saat, "International Enterprises and Trade Unions," Journal of Business Ethics, 27 (2000): 117-123;
51. Geoffrey G. Bell, Robert J. Oppenheimer, and Andre Bastien, "Trust Deterioration in an International Buyer-Supplier Relationship," Journal of Business Ethics, 36 (2002): 65-78.
52. Eisenhardt, Journal of Business Ethics op. cit.
53. Preston, Journal of Business Ethics op. cit.
54. Alan Willis, "The Role of the Global Reporting Initiative's Sustainability Reporting Guidelines in the Social Screening of Investments," Journal of Business Ethics, 43/3 (2003): 233-237.
55. Daniel W. Greening and Daniel B. Turban, "Corporate Social Performance as a Competitive Advantage in Attracting a Quality Workforce," Business and Society, 39/3 (2000): 254-280;
56. Ray Jones and Audrey Murrel, "Signalling Positive Corporate Social Performance: An Event Study of Family-Friendly Firms," Business and Society, 40/1 (2001): 59-78, at p. 62.
57. Jones and Murrel, Business and Society op. cit.
58. Wanda J. Smith, Richard E. Wokutch, K. Vernard Harrington, and Bryan S. Dennis, "Organizational Attractiveness and Corporate Social Orientation: Do Our Values Influence Our Preference for Affirmative Action and Managing Diversity?" Business and Society, 43/1 (2004): 69-96.
59. On the relationship between signalling theory and discretionary disclosure, see Verrecchia, Business and Society op. cit.;
60. R.A. Dye, "Disclosure of Nonproprietary Information," Journal of Accounting Research, 23/1 (1985): 123-145;
61. Jones and Murrel, Journal of Accounting Research op. cit.
62. AccountAbility, Impacts of Reporting: The Role of Social and Sustainability Reporting in Organisational Transformation, London, 2003, 〈www.accountability.com〉.
63. Jean B. McGuire, Alison Sundgren, and Thomas Schneeweis, "Corporate Social Responsibility and Firm Financial Performance," Academy of Management Journal, 31 (1988): 854-872.
64. Marc Orlitzky and John D. Benjamin, "Corporate Social Performance and Firm Risk: A Meta-Analytic Review," Business & Society, 40/4 (2001): 369-396;
65. C. Fombrun and M. Shanley, "What's in a Name? Reputation Building and Corporate Strategy," Academy of Management Journal, 33 (1990): 233-258.
66. Reggy Hooghiemstra, "Corporate Communication and Impression Management-New Perspectives Why Companies Engage in Corporate Social Reporting," Journal of Business Ethics, 27/1-2 (September 2000): 55-68.
67. For a deep analysis of consumers' reaction to responsible companies, see Sankar Sen and C.B. Bhattacharya, "Does Doing Good Always Lead to Doing Better? Consumer Reaction to Corporate Social Responsibility," Journal of Marketing Research, 38/2 (2001): 225-243;
68. Sankar Sen and C.B. Bhattacharya, "Doing Better at Doing Good: When, Why and How Consumers Respond to Corporate Social Initiatives," California Management Review, 47/1 (Fall 2004): 9-24.
69. Cumming, California Management Review op. cit.
70. Tom J. Brown and Peter A. Dacin, "The Company and the Product: Corporate Association and Consumer Product Responses," Journal of Marketing, 61 (1997): 68-84, at pp. 70-71.
71. Social Accountability (SA) 8000 is comprehensive and flexible system for managing ethical workplace conditions throughout global supply chains, 〈www.sa-intl.org/〉.
72. Walter G. Blacconiere and Dennis M. Patten, "Environmental Disclosure, Regulatory Costs, and Changes in Firm Value," Journal of Accounting and Economics, 18/3 (November 1994): 357-377.
73. A broad description of the dimensions that characterize "corporate community involvement" is provided by David Hess, Nikolai Rogovsky, and Thomas W. Dunfee, "The Next Wave of Corporate Community Involvement: Corporate Social Initiatives," California Management Review, 44/2 (Winter 2002): 110-125. In this article, the authors underline the importance of considering these kinds of activities as strategically oriented and accompanying them with a well-developed measurement system. Through systematic evaluation, in fact, it is possible both to provide accountability to stakeholders and to "assist firms in evaluating and understanding their own performance and the impact of their programs." [p. 121.]
74. McWilliams and Siegel, California Management Review op. cit.
75. Vogel, California Management Review op. cit.