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Managing legitimacy through increased corporate environmental reporting: an exploratory study

Managing legitimacy through increased corporate environmental reporting: an exploratory study During the last fifteen years, corporations have increased the amount of information being disclosed in the corporate annual report. Research why this increase has occurred has spawned a number of theories embracing the increasing social and environmental responsibilities of business. One such theory is legitimacy theory. This theory is based on the idea that in order to continue operating successfully, corporations must act within the bounds of what society identifies as socially acceptable behaviour. If a corporation acts outside these bounds, its future profitability and existence could be threatened. Proponents of this theory argue that a corporation can (and does) legitimise itself in the eyes of the public by voluntarily disclosing information about its social activities in the corporate annual report. The main aim of the exploratory research reported in this paper was to discover to what extent legitimacy theory may explain the presence of environmental disclosures in the annual report. In a departure from content analysis methods used in prior research on environmental disclosures and legitimacy theory, a case study approach using semi–structured interviews with senior corporate personnel from three large public corporations identified as operating in environmentally sensitive industries, was adopted. Results suggest that corporations in the study will increase environmental disclosures if a need to defend or justify negative environmental activities with which the company or industry has been associated with had been identified. The incentive to disclose increased if these environmental activities had been brought to public notice via mainstream media. Management also views that the inclusion of environmental information in the annual report may help the corporation shape public opinion. These findings are consistent with the broad thrust of legitimacy theory. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Interdisciplinary Environmental Review Inderscience Publishers

Managing legitimacy through increased corporate environmental reporting: an exploratory study

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1521-0227
eISSN
2042-6992
DOI
10.1504/IER.1999.053837
Publisher site
See Article on Publisher Site

Abstract

During the last fifteen years, corporations have increased the amount of information being disclosed in the corporate annual report. Research why this increase has occurred has spawned a number of theories embracing the increasing social and environmental responsibilities of business. One such theory is legitimacy theory. This theory is based on the idea that in order to continue operating successfully, corporations must act within the bounds of what society identifies as socially acceptable behaviour. If a corporation acts outside these bounds, its future profitability and existence could be threatened. Proponents of this theory argue that a corporation can (and does) legitimise itself in the eyes of the public by voluntarily disclosing information about its social activities in the corporate annual report. The main aim of the exploratory research reported in this paper was to discover to what extent legitimacy theory may explain the presence of environmental disclosures in the annual report. In a departure from content analysis methods used in prior research on environmental disclosures and legitimacy theory, a case study approach using semi–structured interviews with senior corporate personnel from three large public corporations identified as operating in environmentally sensitive industries, was adopted. Results suggest that corporations in the study will increase environmental disclosures if a need to defend or justify negative environmental activities with which the company or industry has been associated with had been identified. The incentive to disclose increased if these environmental activities had been brought to public notice via mainstream media. Management also views that the inclusion of environmental information in the annual report may help the corporation shape public opinion. These findings are consistent with the broad thrust of legitimacy theory.

Journal

Interdisciplinary Environmental ReviewInderscience Publishers

Published: Jan 1, 1999

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