What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

Symposium Review: 25th Anniversary of Moral Boundaries by Joan Tronto

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis Using a sample of large US commercial banks for the period 2009–2011 and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests Contrary to our expectations, CEO duality also impacts positively on CSR disclosure From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns

/pdf/corporate-governance-and-corporate-social-responsibility-1v2h4v44go.pdf

Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector

The concepts of risk and risk management have received considerable attention lately, but this has yet to be reflected in empirical research examining firms’ risk reporting practices. This study seeks to address this gap in the literature and explores risk disclosures within a sample of 79 UK company annual reports using content analysis. A significant association is found between the number of risk disclosures and company size. Similarly a significant association is found between the number of risk disclosures and level of environmental risk as measured by Innovest EcoValue`21™ Ratings. However, no association is found between the number of risk disclosures and five other measures of risk: gearing ratio, asset cover, quiscore, book to market value of equity and beta factor. The paper also discusses the nature of the risk disclosures made by the sample companies specifically examining their time orientation, whether they are monetarily quantified and if good or bad risk news is disclosed. It was uncommon to find monetary assessments of risk information, but companies did exhibit a willingness to disclose forward-looking risk information. Overall the dominance of statements of general risk management policy and a lack of coherence in the risk narratives implies that a risk information gap exists and consequently stakeholders are unable to adequately assess the risk profile of a company.

Risk reporting: A study of risk disclosures in the annual reports of UK companies

This wide-ranging and accessible contribution to the study of risk, ecology and environment helps us to understand the politics of ecology and the place of social theory in making sense of environmental issues. The book provides insights into the complex dynamics of change in `risk societies'.

Environmental Sociology: Theory and Practice@@@Environmental Sociology: A Social Constructionist Perspective@@@Risk, Environment and Modernity: Towards a New Ecology

It is important that stakeholders receive relevant information to be able to understand the risk profile of any financial firm they have an interest in. This study examines risk disclosure practices within annual reports of Canadian and UK banks; these being chosen because of the relatively advanced state of the risk disclosure debate within the respective countries. The paper analyses and classifies the risk information communicated by the sample banks and discusses the nature of the risk disclosures. The usefulness of current disclosures is questioned as relatively little quantitative risk information is disclosed and there is a very strong bias towards disclosing past rather than future risk-related information. Risk disclosure is still evolving within the academic literature and therefore suggestions are made for further empirical research.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jbr.2350032.pdf

Risk disclosure: An exploratory study of UK and Canadian banks

Purpose – The purpose of this paper is to examine risk disclosures by UK companies within their annual reports. Tests are performed to measure the level of the readability of the risk disclosures and to assess whether directors are deliberately obscuring bad risk news.Design/methodology/approach – The paper draws upon methodologies developed in prior empirical studies of annual report readability. Thus it uses the Flesch Reading Ease formula to measure the readability of the risk disclosures and coefficients of variation are used to measure obfuscation. A content analysis approach is adopted to identify risk disclosures.Findings – The paper finds that the mean Flesch reading ease ratings for the sample companies are all below 50 indicating that the level of readability of the risk disclosures is difficult or very difficult and this supports prior research examining the readability of sample passages in annual reports. No evidence is found to suggest that directors are deliberately obfuscating or concealin...

Risk reporting by the largest UK companies: readability and lack of obfuscation

Purpose – This paper examines risk information disclosed by UK public companies within their annual reports. The types of risk information disclosed are analyzed and the authors examine whether a relationship exists between company size or level of risk and risk disclosure totals.Design/methodology/approach – No prior empirical studies of the risk information content of annual reports have been undertaken. To analyze the risk disclosures, a sentence‐based approach was used.Findings – Overall the results indicate that the companies sampled are not providing a complete picture of the risks they face. There is minimal disclosure of quantified risk information and a significant proportion of risk disclosures consist of generalized statements of risk policy. More usefully directors are releasing forward‐looking risk information. The principal driver affecting levels of risk disclosure is company size and not company risk level.Research limitations/implications – Further risk disclosure research is possible in ...

Examining risk reporting in UK public companies

The essence of any bank is that it is a risktaking enterprise and therefore, as a part of good corporate governance, it is expected that relevant risk-related information will be released to the marketplace. Currently, however, it is suggested that there is insufficient disclosure of risk information by banks and as a consequence Pillar 3 of Basel II lays out a comprehensive framework for risk disclosures with the intention that this will enable stakeholders to assess the risk pro.le of a bank. In addition, one outcome of the UK company law review is that there will be a requirement for all quoted companies to discuss risks and uncertainties within the annual report. This paper analyses these risk disclosure requirements while also reviewing current bank disclosure practices within the context of this risk disclosure debate. The important issues of disclosure of forward-looking risk information, location of disclosure and proprietary risk information are also discussed together with their implications for the proposed disclosure requirements.

Philip Linsley

Papers

Risk reporting: A study of risk disclosures in the annual reports of UK companies

Risk disclosure: An exploratory study of UK and Canadian banks

Risk reporting by the largest UK companies: readability and lack of obfuscation

Examining risk reporting in UK public companies

Transparency and the disclosure of risk information in the banking sector