Examining Corporate Social Responsibility Reporting by Companies Essay

The development of globalisation in the past two decennary has seen positive tendencies the manner concern being done globally ( e.g. new or bing concern being set up in other regions/markets ) and one of the major focal point for companies in their one-year fiscal coverage are in the country of CSR ( Corporate Social Responsibility ) . Recent eruptions of ethical weaknesss and disclosures about questionable or opprobrious patterns like Enron prostration, questionable compensation bundles for Tyco and Disney executive, charges of fraud at WorldCom, have led to fresh concerns of corporation duty towards society. There are concerns that corporations globally ( particularly the MNCs, SME, etc ) in their thrust for profitableness may hold overlooked the vulnerable work force, environment and so on therefore perceptual experience of pretermiting CSR ( Corporate Social Responsibility ) .

CSR coverage has evolved from a periphery activity pioneered by socially witting companies into a believable pattern embraced by a figure of major corporations. There has been increase in CSR describing globally in less than a decennary since 2003, with 600 percent addition in non-financial hard-copy coverage ( 600 studies in 2003 ) and 1,300 coverage electronically ( Bebbington, Higgins, and Frame,2008 ) .Major corporations emphasis strongly on CSR as it is of import to its corporate image as it has impact on the society where it operates and hence when concern leaders are doing concern determinations, they have to take into history the involvement of its stakeholders including stockholders, clients, employees, providers, concern spouses, local communities and other organisation. In Malaysia for illustration, a survey by Teoh and Thong ( 1984 ) that deficiency of coverage has maintain the public ignorant of the parts made for CSR even though Malaysia being recognized as being the most active emerging economic systems in relation to CSR development ( Zulkilfi & A ; Amran,2006 ) . As revelation are non required by statute law, corporations find there are no touchable benefits in unwraping extensively in the one-year studies. Surveies has shown among accounting professional there is a deficiency of apprehension and consciousness of the construct of CSR and SEA ( Social and Environmental Accounting ) and because of intense competition-both domestic and global-corporations are increased force per unit area to concentrate on fiscal public presentation ( Zulkilfi and Amran,2006 ; Ibrahim et al,2006 ) .

Corporations describing on the issues of CSR is to minimise hazard to their reputes as its repute among its economically powerful stakeholders is a valuable plus which need protection and development. The stakeholder ‘s perceptual experience of the corporations CSR-policies, patterns and results run into stakeholder ‘s societal and environmental values and outlooks, and makes CSR describing a powerful medium to act upon these perceptual experiences and maximising the gaining potency of their repute. ( Unerman, 2008 ) .

As the CSR coverage are more of voluntary, stairss has been taken to develop a criterion. In 1999 the AA1000 Assurance Standard and GRI ( Global Reporting Initiative ) was developed. AA1000 and GRI criterions are closely aligned but GRI focal point on the specific portion of the societal and environmental accounting and coverage procedure, viz. describing. AA100 criterions aid users to set up a systematic stakeholder battle procedure that generates the indexs, marks, and describing systems to guarantee effectual overall organisational public presentation. It does non order what should be reported instead the “ how ” , thereby giving flexibleness to suit the diverse involvements of all organisations for revelation. GRI provides globally applicable guidelines for describing on sustainable development that emphasizes on stakeholder battle in both its development and content. ( Aras and Crowther, 2008 ) .

3.0 – Discussion and integrating

The reappraisal of the 10 articles above with relation to CSR coverage has identified the undermentioned cardinal issues:

1 ) Percept of the Accounting professional of CSR coverage

2 ) Park criterions for CSR coverage

3 ) Positive impact of CSR describing for organisations

4 ) Stakeholder, political relations, civilizations, etc effects on CSR coverage

3.1 Percept of the Accounting professional of CSR coverage

Deegan et Al. ( 1996 ) mentioned that comptroller were pessimistic in their capacity to supply information with respects to societal and environment issues as they assumed it did non come within the horizon of their occupation range.

State of beginning, corporate size, and corporate civilization have impact on CSR and concern entity ‘s perceptual experience of comptrollers as the legitimate individual to transport out the informations assemblage undertaking has impact how comptrollers respond to CSR.

For illustration, in Malaysia, there are positive attitudes towards CSR among accounting-related professional but the consciousness and apprehension of the constructs of SEA and/or CSR is low ( Zulkilfi and Amran,2006 ) .

Goodwin and Seow ( 1998 ) found that South East Asiatic companies ( including Malaysia ) tend to dawdle behind in CSR revelations compared to their other Asiatic, Europe and American opposite numbers.

Research has shown that globally current immature accounting professionals are more receptive towards CSR and stand for a new beginning of CSR practicians but on the other manus as these immature professionals go through the procedure of organisational socialisation, they could happen themselves in a province of disagreement ( 1s belief and 1s action ) due to the environing organisational civilization that are incompatible with their mentality. These could be a possible accelerator for these comptrollers to divert their CSR values and acquire closely aligned to bing managerial values. As there are positive marks that these immature comptrollers tend to demo a higher alliance to CSR values, instruction of CSR in concern school should go on and pedagogues continue develop future accounting professional consciousness in this country ( Ibrahim, Angelidis, and Howard,2006 ) .

3.2 Common criterions for CSR coverage

Araxess and Crowther ( 2008 ) references that criterions that evolve through consensus instead than infliction is sustainable. The contrasts between these two types criterions is wide- between hegemonic infliction for exploitatory intents and flexible voluntariness- and the latter is sustainable agencies of development.

As we know that CSR coverage is voluntary instead than compulsory and this voluntary attack expressed the world of endeavors get downing to take duty for their true societal impact and recognizes larger force per unit area exerted by assorted stakeholders groupings in add-on to the traditional 1s of portion holders and investors.

Voluntary coverage is deriving the upper manus globally as it reflects a acknowledgment that societal well being is dependent on economic growing. Corporations in their journey towards being to the full socially accountable has recognized that CSR has many aspects and demands to be interpreted otherwise for each organisation and with acknowledgment of globalisation by acknowledging organisational boundary is permeable and they are accountable for the behaviour of other organisation in the value concatenation.

GRI and AA1000 criterions provide set of tools to help organisation manage, step, and pass on overall sustainability public presentation: societal, environmental, and economic. The sum of CSR reported has bit by bit increased and more meaningful without any infliction of criterions and CSR coverage criterions are germinating to turn to the demands of interested parties ( stakeholders, etc ) .

( Aras and Crowther,2008 )

Other than GRI & A ; AA1000, the other CSR coverage criterions in the planetary market are: Social Accountability International ‘s SA8000 criterion and the ISO 14000 environmental direction criterion ( Chen and Bouvain,2008 ) .

Three classs of CSR instruments that requires to the information construction are:

Codes of Behavior

Management Standards

Accounting/Reporting criterions and there are several properties that information offered by these instruments should carry through: lucidity, transparence, completeness, dependability, consistence, quantifiability, verifiability, and comparison.

( Blanco and Souto, 2009 )

3.3 Positive impact of CSR describing on organisation

The WBSCD ( World Business Council for Sustainable Development ) ( 2003, p.15 ) identifies the following benefits from sustainable development coverage ( CSR and SEA ) :

1 ) Making fiscal value

2 ) Attracting long term capital and favourable funding conditions

3 ) Raising consciousness, actuating and alining staff, and pulling endowment

4 ) Reliable direction systems

5 ) Hazard Awareness

6 ) Promoting invention

7 ) Continuous betterment

8 ) Enhancing repute

9 ) Transparency to stakeholders

10 ) Keeping licence to run

Top degree executives are giving more focal point towards this duty of CSR coverage as it help companies to counter hazard, protect corporate image, and derive competitory advantage. Corporates are responsible for the intense usage of fiscal, human and community resources entrusted to them and affected parties need to safeguard against possible maltreatment of corporate power, and CSR coverage is viewed as supplying of import monitoring function in this procedure. Stakeholders has information rights ( Brown and Fraser, 2006 ) .

Future development for CSR/SEA coverage:

More focal point on development of public presentation steps

Intervention by regulative organic structures required for answerability steps

Organization whose values and position are preponderantly capital orientated the CSR/SEA will be more aligned to organisation managerial values therefore stakeholders are better off trusting on externally prepared studies which are independent and free from influence of the internal power agents

( Blanco and Souto, 2009 )

3.4 Stakeholder, political relations, civilizations, etc effects on CSR coverage

Stakeholders ( stockholders, employees, creditors, providers, clients, authorities, and local community ) influence on an organisation is critical and corporations, or more precisely directors and enterprisers must take history into the legitimate involvement of this groups. These stakeholders have inexplicit rights for information sing the organisation activities even though they may non hold any direct influence on the organisation endurance ( Bebbington, Higgins and Frame, 2009 ) . Alone stakeholder outlooks in a peculiar state lead to different CSR coverage patterns between countries.CSR activities that are institutionalized consequences in an improved sum and quality of disclosure.CSR activities that are related to institutionalized values and cultural variables like corporate construction and ownership construction has influence on this values ( Waldman, 2006 ) .Therefore possibility of civilization moderate these variables that will consequence CSR coverage.

Hofstede expresses civilization in five dimension which are: a ) power distance, B ) individuality, degree Celsius ) turning away uncertainness, vitamin D ) maleness, and vitamin E ) long term versus short term orientation. Based on Hofstede ‘s ( 2001 ) masculinity-feminity construct, masculine society are more concerned with power and economic position whereas feminine society are more concerned with societal ends hence CSR coverage are expected to be better in a feminine society. Good illustration are that Norse companies tend to hold more deepness and quality in CSR coverage compared to USA. Gray ( 1988 ) states that disclosures relates to secrecy, and it increases with uncertainness turning away, power distance, and lessening with individuality and maleness. This premise suggest that civilization plays a function act uponing the different types of corporate revelations all around the universe. Supporting this, research shows that Asiatic directors tend to be more close and corporate and high inclination for uncertainness turning away. Therefore fiscal coverage by Asiatic corporations tend to incorporate less voluntary information ( Orij, 2010 ) .

4.0 – Decision and Salient Points

The development of CSR coverage is on an exponentially societal turning way and companies are progressively concentrating this part of coverage as it has economic benefits to the organisation in present and future. Future tendencies shall include standardisation of the coverage and it confidence. Entities in future that fixing CSR describing under criterions that will be later assured will be qualified as Ethical, Ecological, or Socially Responsible.

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