Corporate social disclosure (CSD) can also be referred to as corporatetocorporate social responsibility disclosure, which is defined as information that companies disclose on environmental impact along with the relationship it has with stakeholders through approved communication channels. However, the approaches used by firms in this discourse differ from one country to another, especially if the business has gone global. For this reason, investee companies undertake CSD in annual reports so that they could attract financial support from ethical investment trusts (ETIs). What has to be noted is that firms included under ETIs portfolio provide more quantity of CSD than those that are not included. Ideally, CSD is facilitated through blending social policy and corporate law, thereby reducing asymmetrical information that exist between investors and corporations while instilling confidence in the local or foreign market.
Aim
The aim of this research is to examine the level of CSD within different companies and characteristics of those companies that undertake CSD. Further, this study aims to disclose the approaches that companies use in different countries for CSD. Therefore, researcher employs an empirical approach on CSD, considering that companies that have an ethical investor as one of the shareholders offers greater transparency on social and environmental issues they undertake.
Research Questions
The main research questions are as follows:
1. How should companies undertake CSD?
1. What is the importance of CSD?
1. Why approaches companies uses for CSD in different countries differ?
Project Structure
To successfully deliver this project, a structure that will guide the research work is paramount. One of the most important parts of this paper is reviewing literature that have been written on corporate social disclosure inCSDin
the past so as to establish any gaps that previous researchers left. Methods andThe part of methodology offeroffers opportunity to disclose the paradigm, how data will be collected, datacollection, analysis and reporting. Another importantThe final part of the research work is the timetable. This project has towill be delivered in a specific timeline with the activities to be undertaken and at what time,
outlined in theby Gantt chart as part proposal conclusion.
Preliminary Review of the Literature
InterestThe main research questions to be answered throughout this research project include the following:-
1. How do companies undertake CSD?
2. What are the key elements of CSD?
3. What approaches companies uses for CSD in different countries?
According to Muttakinand (2014), interest is currently growing towards corporate social disclosureCSD for companies to disclose their activities in annual reports for stakeholders, shareholders and even members of the public to review. This is happening within thein both developed and developing countries. However, it has been argued from the perspective of the firm that corporate disclosureCSD can be incorporated into annual report through two different ways: voluntary and mandatory. Activities of financial nature for a firm are mostly regulated by relevant accounting standards that have been adopted within the country of operation. However, if disclosure is not lawfully regulated, it’s referred to as voluntary disclosure (Muttakin and Khan, 2014). Ideally,. Grant (2016) argues CSD is considered a voluntary disclosure in view of moral obligation and accountability a company has towards the society. where it operates.
For this reason, corporate social disclosureAccording to Belal (2016), CSD influences companies performance and is the main reason why policymakers, academics, investors, and governing bodies among others from developed and developing countries are nowadays interested in enhancingto enhance their understanding of the relationship that exist between a firms performance and corporate social disclosure. The same stakeholdersStakeholders are also interested in the approaches companies use in doing their CSD. However, these approaches from prior studies are entirely inconclusive (Dhaliwal, Li, Tsang and Yang, 2014). As this literature remains inconclusive on approaches firmsfirm s use in CSD, there are various factors considered as hindering such conclusiveness and thus the necessity of addressing the factors further in this research.
According to Cavusgil and Knight (2015), growing a business to be competitive enough in the local and global market is a risky venture. However, companies have always taken the risk to pursue their aspirations of establishing in foreign land. There are questions that companies need to consider as they make a decision on the approach to choose so as to establish in a different country or global market. These questions are as follows: “Will the product sell well in the targeted culture? Is your target market familiar with your product or service? Do you feel comfortable in that country? What is the infrastructure like?” (Tou and Noronha 2015, p.19). Although there are fundamental issues to consider in penetrating international market these researchers have not identified best approach companies can choose for different countries. Ideally, this is the gap this research work will be trying to fill.
According to Grant (2016), a company’s choice of approach in a different country must consider the language and culture in that part of the world. Most companies especially those operating chains of installations will probably have current staff live in the new country temporarily during the early stages to operate the business. This will require knowledge of the local culture and languages to operate successfully. Moreover, infrastructure in a different country is paramount as company chooses the approach to apply. For instance, if staff are used to western-style support and accommodation, it is important to establish if such facilities are available (Noronha, 2015). The state of the roads in the country is crucial as well as guarantee for constant supplies for the business to be established.
Making a choice to venture in a different country for a company carries a heavy load. Ravenhill (2017) argues this challenges range from currency fluctuations to chasing opportunities. Ideally, international expansion game has myriad of threats that business people operating only domestically never see. Moreover, going global can present a good opportunity for growth but only when a company chooses the right approach and avoids pitfalls.
Scholars have view that statistical analysis that examines relationship between firm performance and disclosure has limitations within different jurisdictions (Joseph et al., 2016). Moreover, the relationship between firm’s performance and CSD selection of the right indicators on performance of a firm is always a challenge. In essence, categories of measurements for a firms performance which are market-based, accounting based or mixed are also subject to some limitations. Corporate social issues in the developed world are under regulation of strong monitoring bodies and other interested parties. However, in the developing world the issues are monitored effectively for reasons such as corruption, poverty, mismanagement, social inequalities, weak regulations and small capital market (Belal, 2016). Therefore, CSD is considered occidental concept for western countries where there is strong standards and corporate regulations compared to developing countries.
Accordingly, all this literature gives important facts on CSD within the confines of developed and developing countries and the need for companies to do CSD in annual reports not only for the society to know but also enhancing their reputation. However, these disclosures differ from one country to the other as per internal regulations that have been adopted. The fact that the highlighted research works are inconclusive leaves a knowledge gap on the best approaches companies should adopt in different countries of operation (Fernandez-Feijoo, Romero and Ruiz, 2014). Moreover, these approaches will be identified throughin testing the following hypothesis: if
1. If companies were to adequately undertake their corporate social disclosures, chances of businessesbusiness expansion would be substantialhigh as well asthey find the cost of doing business low due to friendly environment. in foreign countries.
2. The key elements of CSD consist of requirements in different countries for disclosures including accounting policies adopted within various jurisdictions. Other key elements of CSD are categorized items within annual company reports and further sub-categories.
3. Lastly, if a country has strict rules on disclosure, companies operating within such jurisdiction will make CSD a key consideration in their reports to comply as compared to nations where disclosure is not strictly followed or is voluntary. The approaches will therefore be different depending on the country of operation.
Methodology
Paradigm
Assumptions will be made in order to adequately collect and analyse available data especially on how this research would be conducted and the researcher’s role. For this reason, the research method will be positivist as the aim is studying society through use of scientific evidence, in this case statistics to reveal operations of CSD (Smith, 2015). Consequently, secondary methods of data collection will be reliable. due to cost constraints and provide an assessment that is more nuanced from original study.
Data Collection and Gathering
For collection of data on corporate social disclosure company’s annual reports will be highly considered (Taylor, Bogdan and DeVault, 2015). There are compelling reasons why annual reports could be used as source of data. First annual report provides most information for a company as significant concerns and issues are expressed comprehensively in annual reports. Secondly, annual reports are easily accessible as information source available electronically and in hard copies. For this reason, exploring CSD reliably, this study will consider source of data as annual reports. Consequently, in order to establish performance of firms, Bloomberg database will be considered other than annual reports. This is because some information on financial performance may not be availed in annual reports (Rothaermel, 2015). Thus, for the purpose of collecting all necessary market data, for a specific authentic platform, Bloomberg database will be relied on.
Data Analysis
In line with earlier studies on the same subject on corporate social disclosure, a checklist of 30 items within the annual report will be selected for the sake of assessing the extent of CSD. Microsoft excel will be reliable as system of data analysis since this items require making categories and sub-categories (Smith, 2015). Further, the selected 30 items are sub-categorised on the basis of different social contexts. It’s important to categorise disclosure during data analysis. The items are basically categorised into ranges that include strategy, employee, governance, donation, customer and generic concept. As such, content analysis will be applied as a measure for corporate social disclosure since is one of the common methods for measuring CSD (Smith, 2015). Content analysis captures text into code into several categories depending on criteria selected and has been used reliably in literature.
Scope
Top 100 firms in market capitalisation and listed in New York Stock Exchange will be considered as sample for the study. Higher capitalisation offers better resources as well as more proactive on disclosures. Moreover, data will be considered for the last 2 years, 2016 and 2017 for corporate social disclosure to avoid distortion.
Limitations
The main limitation is lack of reliable data in annual reports or reports that have been falsified offering less or no data required for the research. Another limitation could be failure to get annual reports within the specific timeline.
Ethical Issues
Some of these ethical issues include respect for privacy and confidentiality, following informed-consent rules, discussion of intellectual property openly and being conscious of multiple roles.
Gantt Chartchart
PeriodWeek
TaskActivity
Who
What Needed
Nov.30-Dec.5Week 1
Reading on strategies for research and making a proposal
Me
Net/Lib
Dec.6-Dec.15Week 2-3
Research all possible topics for the research
Me
Net/Lib
Dec.16-Dec. 23Week 4-5
Meet supervisor for briefing and next steps
Me& Supervisor
Office
Dec.30- Jan.30Week 6-10
Data collection
Me
Net/Lib
Office
Feb.1-Feb.5Week 11
Data entry
Me
Computer/Office
Feb. 6-Feb. 10Week 12
Data analysis
Me
Computer/Office
Feb.11-Feb.15Week 13
Validation of analysed data
Me
Computer/Office
Feb. 16-Feb.22Week 14-15
Writing up report
Me
Computer/Office
Feb.23-March.1Week 16
Presentation
Me
Supervisor/Panel
References
Belal, A.R., 2016. Corporate social responsibility reporting in developing countries: the case of Bangladesh. London: Routledge.
Dhaliwal, D., Li, O.Z., Tsang, A. and Yang, Y.G., 2014. Corporate social responsibility disclosure and the cost of equity capital: the roles of stakeholder orientation and financial transparency. Journal of Accounting and Public Policy, 33(4), pp.328-355.
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Commitment to corporate social responsibility measured through global reporting initiative reporting: factors affecting the behaviour of companies. Journal of Cleaner Production, 81, pp.244-254.
Grant, R.M., 2016. Contemporary strategy analysis: text and cases edition. Hoboken, NJ: John Wiley & Sons.
Joseph, C., Gunawan, J., Sawani, Y., Rahmat, M., Noyem, J.A. and Darus, F., 2016. A comparative study of anti-corruption practice disclosure among Malaysian and Indonesian corporate social responsibility (CSR) best practice companies. Journal of Cleaner Production, 112, pp.2896-2906.
Muttakin, M.B. and Khan, A., 2014. Determinants of corporate social disclosure: empirical evidence from Bangladesh. Advances in Accounting, 30(1), pp.168-175.
Noronha, C., 2015. Corporate social disclosure. London: Palgrave Macmillan.
Ravenhill, J., 2017. Global political economy. Oxford: Oxford University Press.
Rothaermel, F.T., 2015. Strategic management. New York, NY: McGraw-Hill Education.
Smith, J.A., 2015. Qualitative psychology: a practical guide to research methods. London: Sage Publications.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: a guidebook and resource. Hoboken, NJ: John Wiley & Sons.
Tou, C.M.S. and Noronha, C., 2015. The trend of corporate social disclosure in mainland Chinese listed companies: a longitudinal observation. In Noronha, C. (Ed.), Corporate social disclosure (pp.19-58). London: Palgrave Macmillan.
