Impression Management in Sustainability Reports: An Empirical Investigation of the Use of Graphs
08 Jun 2012-Accounting and The Public Interest (American Accounting Assocation)-Vol. 12, Iss: 1, pp 16-37
TL;DR: In this paper, the authors investigate whether firms use graphs in their sustainability reports in order to present a more favorable view of their social and environmental performance, and they find considerable evidence of favorable selectivity bias in the choice of items graphed, and moderate evidence that where distortion in graphing occurs, it also has a favorable bias.
Abstract: The purpose of this paper is to investigate whether firms use graphs in their sustainability reports in order to present a more favorable view of their social and environmental performance. Further, because prior research indicates that companies use social and environmental disclosure as a tool to reduce their exposure to social and political pressures (the legitimacy argument), we also examine whether differences in the extent of impression management are associated with differences in social and environmental performance. Based on an analysis of graphs in sustainability reports for a sample of 77 U.S. companies for 2006, we find considerable evidence of favorable selectivity bias in the choice of items graphed, and moderate evidence that where distortion in graphing occurs, it also has a favorable bias. Our results regarding the relation between impression management and performance are mixed. Whereas we find that graphs of social items in sustainability reports for companies with worse socia...
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TL;DR: In this paper, the authors investigate the use of three reporting practices: stand-alone reports, assurance, and reporting guidance in relation to disclosure proxies that capture the quality of disclosure along three complementary dimensions: the content of the information disclosed, the type of information used to describe and discuss CSR issues, and the managerial orientation.
583 citations
TL;DR: The authors argue that contradictory societal and institutional pressures, in essence, require organizations to engage in hypocrisy and develop facades, thereby severely limiting the prospects that sustainability reports will ever evolve into substantive disclosures.
Abstract: Sustainability discourse is becoming ubiquitous. Still, a significant gap persists between corporate sustainability talk and practice. Prior research on corporate sustainability reporting has relied primarily on two competing theoretical framings, signaling theory and legitimacy theory, which often produce contradictory results regarding the significance and effects of such disclosures. Thus, despite this substantial body of research, the role that sustainability disclosures can play in any transition toward a less unsustainable society remains unclear. In an effort to advance our collective understanding of voluntary corporate sustainability reporting, we propose a richer and more nuanced theoretical lens by drawing on prior work in organized hypocrisy (Brunsson, 1989) and organizational facades (Abrahamson & Baumard, 2008; Nystrom & Strabuck, 1984). We argue that contradictory societal and institutional pressures, in essence, require organizations to engage in hypocrisy and develop facades, thereby severely limiting the prospects that sustainability reports will ever evolve into substantive disclosures. To illustrate the use of these theoretical concepts, we employ them to examine the talk, decisions, and actions of two highly visible U.S.-based multinational oil and gas corporations during the time period of significant national debate over oil exploration in the Alaskan National Wildlife Refuge. We conclude that the concepts of organizational facade and organized hypocrisy are beneficial to the sustainability disclosure literature because they provide theoretical space to more formally acknowledge and incorporate how the prevailing economic system and conflicting stakeholder demands constrain the action choices of individual corporations.
530 citations
TL;DR: In this article, the authors examine the extent to which sustainability reporting can be viewed as a simulacrum used to camouflage real sustainable development problems and project an idealized view of the firms' situations.
Abstract: Purpose – The purpose of this paper is to examine the extent to which sustainability reporting can be viewed as a simulacrum used to camouflage real sustainable-development problems and project an idealized view of the firms' situations. Design/methodology/approach – The method was based on the content analysis and counter accounting of 23 sustainability reports from firms in the energy and mining sectors which had received application levels of A or A+ from the Global Reporting Initiative (GRI). The information disclosed in some 2,700 pages of reports was structured around 92 GRI indicators and compared with 116 significant news events that clearly addressed the responsibility of these firms in sustainable development problems. Moreover, the 1,258 pictures included in sustainability reports were categorized into recurring themes from an inductive perspective. Findings – A total of 90 per cent of the significant negative events were not reported, contrary to the principles of balance, completeness and tra...
469 citations
TL;DR: In this paper, the authors explore the role of chief executive officers' (CEOs) incentives, split between monetary (based on both bonus compensation and changes in the value of the portfolio of stocks and options) and non-monetary (career concerns, incoming/departing CEOs, and power and entrenchment), in relation to corporate social responsibility (CSR).
Abstract: In this study, we explore the role of Chief Executive Officers’ (CEOs’) incentives, split between monetary (based on both bonus compensation and changes in the value of the CEO’s portfolio of stocks and options) and non-monetary (career concerns, incoming/departing CEOs, and power and entrenchment), in relation to corporate social responsibility (CSR). We base our analysis on a sample of 597 US firms over the period 2005–2009. We find that both monetary and non-monetary incentives have an effect on CSR decisions. Specifically, monetary incentives designed to align the CEO’s and shareholders’ interests have a negative effect on CSR and non-monetary incentives have a positive effect on CSR. The study has important implications for the design of executive remuneration (compensation) plans, as we show that there are many levers that can affect the CEO’s decisions with regard to CSR. Our evidence also confirms the prominent role of the CEO in relation to CSR decisions, while also recognizing the complexity of factors affecting CSR. Finally, we propose a research design that takes into account endogeneity issues arising when examining compensation variables.
245 citations
Cites background from "Impression Management in Sustainabi..."
...…literature on corporate social and environmental performance (see, e.g., Waddock and Graves 1997; Johnson and Greening 1999; Hillman and Keim 2001) as well as in recent social and environmental accounting research (see, e.g., Cho et al. 2006; Cho and Patten 2007; Cho et al. 2010; Cho et al. 2012)....
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References
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TL;DR: In this article, the authors report the results of a rigorous study of the empirical linkages between financial and social performance, finding that corporate social performance (CSP) is positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related.
Abstract: Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management, rather than traditional arenas of strategic management. Using a greatly improved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. Corporate social performance (CSP) is found to be positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related. CSP is also found to be positively associated with future financial performance, supporting the theory that good management and CSP are positively related.? 1997 by John Wiley & Sons, Ltd
5,922 citations
"Impression Management in Sustainabi..." refers background or methods in this paper
...…and Keim, 2001), the KLD data have been used extensively in US management research on corporate social and environmental performance issues (e.g., Waddock and Graves, 1997) and more recently in social and environmental accounting research (see, e.g., Cho et al., 2006; Cho and Patten, 2007; Cho…...
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...The company draws upon a variety of sources to capture relevant SEP data (Waddock and Graves, 1997; Hillman and Keim, 2001)....
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Book•
01 Jan 1983TL;DR: The visual display of quantitative information is shown in the form of icons and symbols in order to facilitate the interpretation of data.
Abstract: The visual display of quantitative information , The visual display of quantitative information , مرکز فناوری اطلاعات و اطلاع رسانی کشاورزی
5,365 citations
Book•
01 Sep 1998TL;DR: The seven revolutions for sustainable capitalism: competition, competition, triple win revolution, values from me to we revolution, information and transparency, no hiding place revolution, lifecylces from conception to resurrection revolution, partnerships after the honeymoon revolution, time three scenarios revolution, corporate governance, stake in the future, sustainability transition, value shifts, value migrations the worlds of money and power, sustainability audit, how are you placed.
Abstract: Introduction - is capitalism sustainable? seven revolutions for sustainable capitalism revolution 1 - competition - going for the triple win revolution 2 - values - from me to we revolution 3 - information and transparency - no hiding place revolution 4 - lifecylces - from conception to resurrection revolution 5 - partnerships - after the honeymoon revolution 6 - time - three scenarios revolution 7 - corporate governance - stake in the future the sustainability transition - value shifts, value migrations the worlds of money and power the sustainability audit - how are you placed?
5,329 citations
TL;DR: In this article, the authors test the relationship between shareholders' value, stakeholder management, and social issue participation and find that, while the latter is positively associated with shareholders' wealth, the former is negatively associated with their value.
Abstract: We test the relationship between shareholder value, stakeholder management, and social issue participation. Building better relations with primary stakeholders like employees, customers, suppliers, and communities could lead to increased shareholder wealth by helping firms develop intangible, valuable assets which can be sources of competitive advantage. On the other hand, using corporate resources for social issues not related to primary stakeholders may not create value for shareholders. We test these propositions with data from S&P 500 firms and find evidence that stakeholder management leads to improved shareholder value, while social issue participation is negatively associated with shareholder value. Copyright © 2001 John Wiley & Sons, Ltd.
3,465 citations
"Impression Management in Sustainabi..." refers background or methods in this paper
...Because the KLD database provides a quantifiable and enhanced corporate SEP measure and preserves its independent rating system (Hillman and Keim, 2001), the KLD data have been used extensively in US management research on corporate social and environmental performance issues (e....
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...Because the KLD database provides a quantifiable and enhanced corporate SEP measure and preserves its independent rating system (Hillman and Keim, 2001), the KLD data have been used extensively in US management research on corporate social and environmental performance issues (e.g., Waddock and…...
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...The company draws upon a variety of sources to capture relevant SEP data (Waddock and Graves, 1997; Hillman and Keim, 2001)....
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TL;DR: In this paper, Elkington explores how effective, long-term partnerships will be crucial for companies making the transition to sustainability and offers approaches and examples of keen interest, which can be found in the Cannibals with Forks book.
Abstract: Editor's Note: John Elkington's new book, Cannibals with Forks: The Triple Bottom Line of 21st-Century Business, has been hailed as “practical, compassionate and deeply informed, a brilliant synthesis of his genius for cutting through the thicket of tough issues–in the world of business and sustainability–and producing elegant solutions that can be applied today” (Paul Hawken). We are pleased to have the opportunity to publish a selection from this award-winning book. In this discussion of partnerships, Elkington explores how effective, long-term partnerships will be crucial for companies making the transition to sustainability and offers approaches and examples of keen interest. Special thanks to Capstone Publishers, U.K., for their gracious cooperation.
3,021 citations