Susanne Arvidsson

The corporate communication process between listed companies and financial analysts

Purpose – The purpose of the paper is to analyse the views of management teams regarding different aspects related to the corporate communication process with financial analysts. The focus is the following aspects: incentive for communication; sources of information; and frequency and initiator of communication.Design/methodology/approach – The data is based on a comprehensive questionnaire survey addressed to investor‐relation managers (IRMs) at the largest companies listed on the Stockholm Stock Exchange.Findings – The study confirms an increasing frequency of corporate communication, a short‐term orientation, more demand for direct contacts, and embracing of new communication tools. The findings reveal that quite a few challenges lie ahead in shaping the efficient corporate communication process of tomorrow. The most critical relate to the risk of opportunity costs due to lost management opportunities caused by increased demand from stock‐market actors for communication time with management teams and t...

Corporate social responsibility and stock market actors : A comprehensive study

Purpose– The purpose of this study is to analyse the views stock market actors have on corporate communication of corporate social responsibility (CSR) information grounded on legitimacy and stakeholder theory. Recent findings suggest that management teams experience an increased interest and demand for CSR information from the actors on the stock market and that this underlie a focus shift. This is quite astonishing considering that the interest from just stock market actors in CSR information always has been meagre. However, due to lack of recent studies, it has not been confirmed that de facto there has been a trend shift among stock market actors towards an increased interest in CSR information.Design/methodology/approach– The data are derived from in-depth semi-structured interviews with financial analysts at international investment banks.Findings– The study confirms that the focus shift is not at all driven by the actors in the stock market. Quite the opposite. They express mistrust towards this information and a continued meagre interest in it.Research limitations/implications– Findings from the study suggest the need for more research on how different stakeholders view CSR information. It also opens up for discussions on regulations concerning CSR information.Practical implications– The findings imply that management teams might have deluded themselves and become victim to what Christensen and Cheney (2000) refer to as self-seduces, i.e. seeing things that are not really there. The findings might also indicate an enlargement of the stakeholder perspective. Thus, a subtle shift from a bilateral relationship (company – shareholders) towards a multilateral set of relationships (company – stakeholders) camouflaged under the justification from management teams that the increased interest comes from the stock market.Originality/value– The study contributes to the scarce research on how actors in the stock market view CSR. The findings are of interest and relevance to the business and academic communities in their ongoing quest of unravelling the core of CSR and business ethics.

An Exposé of the Challenging Practice Development of Sustainability Reporting: From the First Wave to the EU Directive (2014/95/EU)

This chapter sets out to give an expose of how sustainability reporting has developed into a global reporting practice. It gives a theoretical background to why companies (should) engage in sustainability reporting. Three arguments for providing sustainability reporting are at focus i) gaining, maintaining and/or repairing legitimacy, ii) improving stakeholder relations and iii) decreasing information asymmetry. Although sustainability reporting today has become a global reporting practice, this practice has been criticised throughout the years. The chapter highlights different types of critique: critique against companies’ engagement in sustainability activities per se, critique against sustainability reporting being mere window-dressing (green-, blue- or even SDG-washing) and critique against the poor informational quality of sustainability reporting. This leads the way to a focus on how a new set of voluntary-sustainability standards has been developed to help companies to implement, manage and report on sustainability activities. Using the framework by Behnam and MacLean (2011), three types of voluntary-sustainability standards are discussed: principle-, reporting- and certification-based standards. Attempts to develop mandatory requirements are also at focus in this discussion. In the latter part of the chapter, a financial market perspective is put on sustainability reporting. This reveals how the scepticism among the actors on the financial markets has decreased as the global sustainable investment market has increased. The chapter ends with highlighting the EU Directive (2014/95/EU), which from financial year 2017 mandates the largest EU companies to provide sustainability information in their corporate reports. This raises the question, whether the Directive will be able to enhance the informational quality of sustainability reporting.

Sense-Making and Sense-Giving: Reaching Through the Smokescreen of Sustainability Disclosure in the Stock Market

Financial analysts’ role as information intermediaries between management teams and investors is vital for the efficient allocation of resources on the stock market. The increased focus on sustainability information in corporate reports has affected financial analysts in their important work of interpreting, assessing and communicating value-added information to their clients, i.e. the investors. The challenges they face relate to the ambiguous nature of sustainability information and its difference from traditional financial information. How do analysts reach through this smokescreen? How do analysts make sense of sustainability information, and how do they give sense to this information when they provide investment advices to their investors? In this chapter, these challenges are addressed from a cognitive-frame perspective. We argue that the first part of 2000s was characterized by cognitive dissonance due to both a low social legitimacy and a low cognitive legitimacy, i.e. sustainability was not yet requested by the investors to be attended to and it was regarded too ambiguous to be relevant for being considered in a valuation context. In the latter part of 2010s, we argue that there is only a partial cognitive dissonance. At this time, sustainability information is beginning to be socially legitimate and requested by investors. However, the complexity of the situation remains. This type of information is still not considered as cognitive legitimate due to the ambiguous nature, which renders difficulties for the sense-making and sense-giving processes. The findings have implications not the least in the ongoing quest of developing frameworks, standards and legislation (e.g. the EU directive (2014/EU/95)), that opt for improving the relevance, credibility and comparability of sustainability information.

How are Stakeholder Relations Communicated in Sustainability Reports? A Longitudinal and Cross-country Focus

Since stakeholders today are more aware and informed of various sustainability aspects, they are also becoming more involved and participate in shaping sustainability discourses (see e.g. Golob et al. 2017). It is vital to understand if companies utilise this accentuated commitment towards sustainability aspects by interacting with their stake holders and involving them in different engagement activities aimed at developing and improving their sustainability practices. Thus, grounded on legitimacy and stake holder theory, the objective is to analyse how stakeholder relations are communicated in sustainability reports. The focus is on the extent, content and structure of informa tion related to three themes; stakeholder-identification analysis, stakeholder engagement & dialogue and materiality process. The study applies a content-analysis methodology in which sustainability reports from two EU-reporting settings, Germany and Sweden, are at focus. The reports come from the largest listed companies included in the indexes DAX30 and OMXS30. The analysis confirms an increased and elaborated focus on sustainability relations in both the German and Swedish sustainability reports. While stakeholder-identification analysis receives remarkable little attention in the reports, much focus is on stakeholder engagement & dialogue and the materiality process. However, most companies fail to explain how the outcome of both their stakeholder-engagement activities and materiality process will affect or be integrated in business operations. This indicates that the companies might not or at least not fully utilize the involvement with their stake holders to develop and improve their sustainability practices.