The current status of greenhouse gas reporting by Chinese companies: a test of legitimacy theory

Purpose – The purpose of this paper is to investigate the factors driving greenhouse gas reporting by Chinese companies.
Design/methodology/approach – Content analysis of annual reports and corporate social responsibility (CSR) reports for the year 2010 of the top 100 A-share companies listed on Shanghai Stock Exchange was conducted to investigate the extent of greenhouse gas reporting. Multiple regression analysis was performed to determine the factors driving these companies’ greenhouse gas reporting.
Findings – It was found that most Chinese companies reported neutral and good news. The results also indicate larger companies operating in an industry which has higher level of carbon dioxide emissions tend to have higher levels of greenhouse gas disclosures, consistent with the expectation of legitimacy theory. However, profitability and overseas listing were not significantly related to greenhouse gas reporting. This is consistent with the findings of previous literature. Finally, contrary to expectations, state-owned companies report less greenhouse gas information than private companies.
Originality/value – The paper contributes towards theory development by testing legitimacy theory in the context of greenhouse gas reporting by Chinese companies and contributes to existing literature on greenhouse gas reporting by focussing on the large emerging economy of China. The practical contribution of the paper rests in the area of accounting practice. The results outline the dearth in greenhouse gas reporting by Chinese companies, suggesting there needs to be future development of accounting standards in this area.

Environmental reporting in annual reports: an examination of Australian state government departments

The nature and extent of environmental reporting within the annual reports of four Australian state government departments over a six year period from 2000-2006 is examined in this study. The Victorian Government Department of Sustainability and Environment (DSE), the New South Wales Department of Energy, Utilities and Sustainability (DEUS), the South Australian Department for Environment and Heritage (DEH) and the Tasmanian Department of Primary Industries, Water and Environment (DPIWE) have been selected. These departments are responsible for environmentally sensitive areas such as conservation, water management and public land management. The nature of these areas is a factor which might potentially affect disclosure practices so it might be expected that these departments disclose more environmental information than departments in less environmentally and politically sensitive areas. These departments also have a number of politically active stakeholder groups, including Aboriginal communities and organisations, environmental groups and forest and timber industries. This study found a reduction in environmental reporting after a five year period of increases.

Media pressures and corporate disclosure of social responsibility performance : a case study of two global clothing and sports retail companies

This paper investigates the social and environmental disclosure practices of two large multi-national companies, specifically Nike and Hennes and Mauritz. Utilising a joint consideration of legitimacy theory and media agenda setting theory, we investigate the linkage between negative media attention, and positive corporate social and environmental disclosures. Our results generally support a view that for those issues attracting the greatest amount of negative media attention, corporations react by providing positive social and environmental disclosures. The results were particularly significant in relation to labour practices in developing countries – the issue attracting the greatest amount of negative media attention for the companies in question.

Media pressures and corporate disclosure of social responsibility performance information : a study of two global clothing and sports retail companies

This paper investigates the social and environmental disclosure practices of two large multinational companies, specifically Nike and Hennés & Mauritz. Utilising a joint consideration of legitimacy theory and media agenda setting theory, we investigate the linkage between negative media attention, and positive corporate social and environmental disclosures. Our results generally support a view that for those industry-related social and environmental issues attracting the greatest amount of negative media attention, these corporations react by providing positive social and environmental disclosures. The results were particularly significant in relation to labour practices in developing countries - the issue attracting the greatest amount of negative media attention for the companies in question.

The accounting professional of the future : never mind the quality check the look!

Using legitimacy theory this paper contrasts the values portrayed by public accounting firms via their recruitment practices and society's expectations of the responsibilities of a professional accountant. Society confers on organisations legitimacy when the value system of the organisation is congruent with the value system of the larger social system (Deegan, 2006). It is argued that there is increasing incongruence between the value system of public accounting firms (that employ accounting graduates) and society's value system that includes an expectation of accountants to act in the public interest. This study draws on evidence from recent corporate collapses, to question whether the attributes/skills displayed by accountants have reduced their capacity to act in the public interest. Interviews with employers show that preferences for employment are given to graduates who 'fit the culture' of the organisation and have the ability to 'market' the firm to clients. Attributes that define the professional accountant appear to be less highly valued. It is concluded that the attributes valued in the workplace today have the potential to increase the risk of 'severing the social contract' between the accounting profession and society.

Corporate governance and corporate social responsibility disclosures : evidence from an emerging economy

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures.

A study of voluntary disclosure of listed Chinese firms - a stakeholder perspective

Purpose – The aim of this paper is to investigate stakeholder power changes and their impact on firms' disclosure decisions in the Chinese stock market. Using legitimacy theory and stakeholder theory, the paper identifies newly emerged stakeholder groups for listed Chinese firms during three distinguished periods of the development of the Chinese stock market.

Design/methodology/approach – Panel data analysis was undertaken over a period from 1995-2006 with an aim to examine the influence of stakeholder power changes on voluntary disclosures made by 297 listed firms in their 12 years of annual reports. A voluntary disclosure checklist has been used for hand-collecting data from annual reports.

Findings – The finding shows that different stakeholder groups exert different degrees of influence on firms' decision-making in respect of information disclosure during different stages of the development of the Chinese stock market.

Research limitations/implications – The impact of a stakeholder power changes on corporate disclosure has not been well addressed and how listed Chinese firms respond to these changes is still a significant gap in the Chinese corporate disclosure literature. In this study, the paper uses proxies to represent each stakeholder group, discuss power changes of each group and predict the impact of power changes on firms' voluntary disclosure.

Originality/value – The paper identifies the new content of the “social contract” between listed firms and Chinese society and identifies various stakeholder groups of listed Chinese firms in the context of a new “social contract”. The paper predicts that voluntary corporate disclosure is the result of stakeholder pressures and firms use voluntary disclosure as one of their strategies to manage the firm-stakeholder relationship.

Why do companies not produce sustainability reports?

Sustainability reporting emerged on the corporate scene nearly 30 years ago as a key mechanism through which business organisations would manage a transition to a new business landscape dominated by greater concern and consciousness about sustainability. While it has become something of a feature on the corporate agenda in some parts of the world, the majority of business organisations do not undertake this type of reporting. This paper explores why 23 of Australia's top 200 companies do not undertake sustainability reporting. The study is situated in the context of a considerable literature that promised numerous benefits to be derived from this type of reporting. The paper uncovers various social and organisational factors that raise some new questions about legitimacy theory, corporate accountability and the spread and uptake of this organisational practice.

Does the global reporting initiative influence sustainability disclosures in Asia-Pacific banks?

This article examines sustainability disclosures by the major banks in the Asia-Pacific region (the six largest banks from each of four countries: Australia, Japan, China and India) during the period 2005–2012. The findings show sustainability disclosures by banks that participate in the global reporting initiative (GRI) are significantly higher than disclosures by those banks that have not participated in the GRI. Amongst those banks that have participated in the GRI there is a higher rate of disclosure by externally assured banks than by non-externally assured banks. Among the GRI participating banks, there was significant variation of disclosures between countries. Disclosures by Australian banks appeared to be significantly higher than disclosures by banks in any other countries under observation. The findings are discussed from a moral legitimacy perspective. Consistent with this view, the banks under study were responsive to the GRI, which is seen as an influential actor that shapes and reflects the expectations of the broader community. However, the role of the GRI in minimising country differences in disclosure by banks is not significant.

Police legitimacy, ideology and qualitative methods: a critique of procedural justice theory

I argue that there are unconsidered complexities to police legitimacy and use examples from my study of police–public consultation forums in Edinburgh, Scotland to illustrate. I make a number of conceptual and methodological critiques by drawing upon Steven Lukes’ social theory on power to show how legitimacy can be a product of authority relations as much as it is a cause of authority relations. This view finds support from systems-justification theory. I also tackle Beetham’s conception of legitimacy and argue that there is evidence from police studies that the police breach his key antecedents to legitimacy without incurring the expected consequences. Furthermore, I take an original methodological approach to studying police legitimacy which reveals additional insights. For instance, Bottoms and Tankebe suggest legitimacy addresses multiple ‘audiences’; I would also add that it addresses multiple recipients as legitimacy is shown to vary among officers and positions of rank.

Securing institutional legitimacy or organizational effectiveness?

Purpose: The purpose of this paper is to consider the impact of a major initiative (the National Competition Policy) and pieces of legislation (the Local Government Act and the Local Government Finance Standards) on the internal practices of a large Australian local authority.

Design/methodology/approach: A theoretical framework is developed using new public management (NPM) and neo-institutional theory literatures to explain the findings. A case study approach was applied to collect the data for the research.

Findings: The findings reveal that the National Competition Policy 1993, the Local Government Act 1993 and the Local Government Finance Standards 1994 mainly have brought about significant changes to the organisation's internal management control processes, such as financial reporting, budgeting and performance appraisal. The changes brought in appeared to be coincidentally similar to NPM ideals. Furthermore, senior managers (such as the chief executive and divisional heads) played a major role in implementing new accounting technologies (activity-based costing and the balanced scorecard type performance measurement system).

Research limitations/implications: Future research on public sector financial management from the outset of organisational contexts could considerably further the stock of knowledge in this area, especially given the rapid changes occurring within the public sector throughout the world. Future research may wish to extend this study by assessing how external legitimating functions become internal reality, the perceptions of reality of the organisational members, and how these perceptions change over time.

Practical implications: The findings reported provide evidence to further our understanding of how the introduction of private sector styles of organisational practices into large areas of the public sector brought about significant changes in the demand for “new” financial management practices.

Originality/value: The findings reported on in this paper will open a new path of research that may increase our understanding about the factors that play a role in the design of management and accounting systems in a public sector context. Further, they will help policy makers and public sector managers in their day-to-day decision-making.

The organizational legitimacy of the Bauhaus

Gaining and maintaining organizational legitimacy can be a major issue
for social and political structures such as cultural organizations. Legitimacy, sometimes called credibility, brings with it access to resources needed for survival and development. Organizations without legitimacy tend not to be successful in attracting grants, subsidies, and sponsorships. Research suggests that legitimate organizations may be seen as valuable social structures (Hybels 1995; Suchman 1995) and come to be “taken for granted” as part of the social fabric. In this article, I explore organizational legitimacy using the framework of institutional theory. I first define legitimacy and then discuss the key concepts of organizational legitimacy. Next, I present a case study based on an art/craft/design school. The school, known as the Bauhaus, existed between 1919 and 1933 in three German cities—Weimar, Dessau, and Berlin. Deterministic views of the pre–World War II environment suggest that the Nazi party was responsible for the closure of the Bauhaus. I argue that other factors were apparent. The Nazi regime was becoming a significant force in the late 1920s, but the story of the Bauhaus becomes more complex when viewed under the rubric of arts management and organizational legitimacy. In this article, I discuss how the Bauhaus sought and managed legitimacy and the role that the state and other actors played in granting that legitimacy. In conclusion, I offer a summary of the relevance of legitimacy to contemporary arts organizations.

Emotional turmoil at the Bauhaus : problems of internal and external legitimacy : an historical case study

Walter Gropius established the Bauhaus in Germany in 1919. The organization established one of the most important design movements of the twentieth century. The organization had a very brief existence and was fraught with disruptions and emotional turmoil. Despite the difficulties, Gropius managed to keep the organization alive long enough for its extraordinary creativity to be harnessed and developed. The organization closed in 1933, but by that time its legitimacy as a source of design and pedagogy was assured. Organizational survival is often dependent on government subsidies, support through sales, donations or sponsorships. A factor in attracting this support is the perceived legitimacy of the organisation. Legitimacy is defined as a degree of consensus that the meanings and behavior of an organisation are valid and desirable by society in
general. Legitimacy remains an undeveloped concept. This paper reviews relevant theories of legitimacy, considers the role of emotions in shaping legitimacy and the emotions evoked as legitimacy is negotiated by internal and external stakeholders. A historical case study of the Bauhaus provides the backdrop for portraying the focal role emotions can play in institutionalization. The paper concludes with a discussion of the lessons of legitimacy available to contemporary cultural organisations.

Public satisfaction with police : using procedural justice to improve police legitimacy

Policing research and theory emphasises the importance of supportive relationships between police and the communities they serve in increasing police effectiveness in reducing crime and disorder. A key reason people support police is that they view police as legitimate. The existing research literature, primarily from the United States, indicates that the most important factor in public assessments of police legitimacy is procedural justice. The present study is the first in an Australian jurisdiction to examine the effect of procedural justice and police legitimacy on public satisfaction with police. Using responses to a large postal survey (n = 2611), findings show that people who believe police use procedural justice when they exercise their authority are more likely to view police as legitimate, and in turn are more satisfied with police services. This study differs to US-based research in the greater importance of people's evaluations of instrumental factors in judgments of police legitimacy. The findings are important as they confirm that people's assessments of fair and effective policing in Australia will be enhanced by policing strategies that emphasise the use of procedural justice in encounters with the public.