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Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate soci - Essay Example

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Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate soci

This view is consistent with stakeholder theory which holds that firms are under a duty to take account of the interest “of all parties affected by their actions” (Branco & Rodrigues, 2007, p. 7). In this regard, CSR involves a variety of issues reflecting the firm’s societal involvement and include ethics, governance, philanthropy, product and environmental safety, human rights and social engagement (Branco & Rodrigues, 2007). The question for consideration is whether or not firms report on their CSR practices as a means of providing useful information about their CSR performance or whether or not CSR reporting is merely an exercise in public relations. Accountants who were traditionally concerned about financial reporting, play a significant role in social reporting and ensuring that firms account for their compliance with corporate social responsibility (CSR) (Tilt, 2009). Legitimacy theory, however, suggest that firms, rather than report on CSR, will usually file reports in response to a social/environmental issue and in an attempt to justify or “legitimise corporate actions” (Guthrie & Parker, 1989, p. 343). ...
A study conducted by Roberts (1992) found that stakeholder theory was capable of explaining social responsibility reporting. The study found in particular that stakeholder power, business strategies and financial performance all combined to influence the degree of CSR reporting (Roberts, 1992). Even so, stakeholder theory does not resolve the issue of whether or not firms that disclose or report on CSR are in fact responsible corporate citizens or are reporting as a means of attempting to persuade stakeholders that they are socially responsible firms. As Mahoney (2012) informs, firms do not have a legal duty to file CSR reports in the same manner that they are bound to file financial reports. As a result there is “information asymmetry about firms’ CSR practices” (Mahoney, 2012, p. 4). Mahoney (2012) suggests that: …in the face of information asymmetry, one way that firms can communicate to stakeholders that they are good corporate citizens is to voluntary issue standalone CSR reports (p. 4). Mahoney, Thorne, Cecil and LaGore (2013) argue that although firms have been increasingly filing standalone CSR reports voluntarily, it is not altogether clear just why firms file these reports. Mahoney et al. (2013) suggested that there are two possible theoretical explanations for why firms voluntarily file standalone CSR reports: “signalling and greenwashing” (p. 350). Signalling refers to the idea that a firm will file a standalone CSR report in order to signal that they are committed to CSR and it is therefore assumed that firms that file a standalone CSR report have stronger CSR commitments than those who do not file CSR reports. Greenwashing refers to the idea that firms file standalone CSR ...Show more

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Do Corporate Social Responsibility (CSR) Reports Provide Shareholders and Stakeholders with Useful Information on Corporate Social and Environmental Performance or are they Merely a Public Relations Vehicle? By Course Institution Date Do Corporate Social Responsibility (CSR) Reports Provide Shareholders and Stakeholders with Useful Information on Corporate Social and Environmental Performance or are they Merely a Public Relations Vehicle?…
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Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate soci essay example
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