AAAJ
15,3
312
Accounting, Auditing &
Accountability Journal,
Vol. 15 No. 3, 2002, pp. 312-343.
# MCB UP Limited, 0951-3574
DOI 10.1108/09513570210435861
Received July 2000
Revised January 2002
Accepted January 2002
An examination of the
corporate social and
environmental disclosures of
BHP from 1983-1997
A test of legitimacy theory
Craig Deegan, Michaela Rankin and John Tobin
School of Accounting and Law, RMIT University, Melbourne, Australia
Keywords Disclosure, Environment, Management, Business policy, Perception, Annual reports
Abstract This study examines the social and environmental disclosures of BHP Ltd (one of the
largest Australian companies) from 1983 to 1997 to ascertain the extent and type of annual
report social and environmental disclosures over the period, and whether such disclosures can be
explained by the concepts of a social contract and legitimacy theory. This research is also
motivated by the opportunity to compare and contrast results with those of Guthrie and Parker, in
whose study the social and environmental disclosures made by BHP Ltd were also the focus of
analysis. In testing the relationship between community concern for particular social and
environmental issues (as measured by the extent of media attention), and BHP's annual report
disclosures on the same issues, significant positive correlations were obtained for the general
themes of environment and human resources as well as for various sub-issues within these, and
other, themes. Additional testing also supported the view that management release positive social
and environmental information in response to unfavourable media attention. Such results lend
support to legitimation motives for a company's social and environmental disclosures. A trend in
providing greater social and environmental information in the annual report of BHP in recent
years, and its variable pattern, was also evidenced.
1.Introduction
This study examines whether an organisation, specifically BHP Ltd (one of
Australia's largest diversified public companies), discloses social and
environmental information in response to particular social expectations,
expectations which typically change across time[1]. The research updates the
work undertaken by Guthrie and Parker (1989) which studied the annual
reports of BHP Ltd for the 100 years to 1985 and which has become a highly
cited and respected paper in the area of social and environmental reporting.
The current study examines the extent and type of corporate social and
environmental reporting by BHP Ltd over a 15-year period from 1983-1997. As
with Guthrie and Parker (1989), this study correlates social disclosure to a
measure of public concern. However, this study uses a different measure of
public concern than that used by Guthrie and Parker (1989). Specifically, this
study uses the extent of media attention devoted to the activities of BHP Ltd
The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/0951-3574.htm
The authors would like to acknowledge the helpful comments made by Rob Gray, Lee Parker,
James Guthrie, Markus Milne and the anonymous referees.