Gm O'Donovan

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.

The accountants’ perspective on sustainable business practices in SMEs

Purpose – This paper aims to explore the accountants’ perspective towards their role and function as business advisors in assisting with the adoption of sustainable business practices (SBPs) in small and medium enterprises (SMEs). Design/methodology/approach – A questionnaire-based study was conducted on members from one of Australia’s leading professional accounting organizations. Findings – Key findings from this research highlighted deficiencies in the effectiveness of the accounting profession in assisting SMEs in implementing SBPs despite a desire from clients for accountants to provide this advice and a belief that accountants are best placed to do so. Further, an expectations gap is evident between the level of involvement accountants believe they should be having in assisting SMEs and the level of involvement that is currently occurring. Research limitations/implications – This finding has implications for the accounting profession, with accountants needing to examine their current business approa...

Corporate legitimacy and environmental reporting: identifying the audiences and choosing disclosure approaches (work in progress)

It is generally agreed that private corporations have duties and responsibilities greater then merely maximising profits for shareholders. These take the form of increased social responsibilities and this idea has its origins in the notion of a social contract between the corporation and society. Over the last two decades, the impacts that corporate activities have had on the natural environment has emerged as one of the most important social issues for corporations to manage. Legitimacy theory posits that the greater the likelihood of adverse shifts in the social perceptions of how a company is acting, the greater the desirability on the part of the company to attempt to manage these shifts in social perceptions: to remain legitimate. Managing legitimacy may take many forms, from the corporation changing its activities so that it is consistent with societys values, through to attempts to influence processes that may cause a change in social perceptions. Whatever form legitimacy management takes, to be successful the message must be communicated to society. Research suggests that the main way this communication takes place is through the disclosure of environmental information in the corporate annual report. What is not clear from the research to date, is whether corporations target these disclosures at specific audiences, those deemed more important to a corporations continuing legitimacy, and if so, are there specific purposes for these disclosures. The purpose of this paper is to evaluate the current literature in order to explore the idea that corporations target legitimation tactics at specific stakeholder groups (referred to as conferring publics) and that corporations use environmental disclosures in the annual report to depict, or positively influence, a perception of congruence with the views of who it determines are its conferring publics.

Social and environmental accounting in Tasmania - taking it to the world

This paper commences with an overview of the history of social and environmental reporting and accounting followed by a summary of the prevalence of social and environmental accounting education. This leads to the main section of the paper, which includes a detailed discussion and evaluation of an undergraduate coursework subject in Social and Environmental Accounting. Developed by the School of Accounting and Finance at the University of Tasmania, originally for a multidisciplinary undergraduate degree in Natural Environments and Wilderness, the subject is available to all students who have completed first year undergraduate studies in any discipline. The subject is largely designed around a Tasmanian mining industry case study, which students use as a basis for exploring local issues in Tasmanias west coast, and how they affect, and are affected by, global markets and global politics. Developed to be delivered flexibly and freed from the constraints of face–to–face teaching, the teaching and learning pedagogy of this subject makes it accessible and available to any student, anywhere in the world at any time.