Corporate social and environmental reporting

A review of the literature and a longitudinal study of UK disclosure

Rob Gray, Reza Kouhy and Simon Lavers
Department of Accounting and Business Finance, University of Dundee, Dundee, Scotland
Articulating corporate social reporting Although corporate social reporting (CSR)[1] has been the subject of substantial academic accounting research for over two decades, the literature does not possess an overall coherence (see, for example, Ullmann, 1985). There are many reasons for this at least some of which arise as a result of CSR not sharing many of the core certainties of traditional accounting. So, for example, CSR is not enshrined in legislation equivalent to Companies Acts; as a result it is neither practised systematically by organizations nor able to claim either universal recognition or universal definition. Indeed, there is little about CSR which is not contestable and contested. CSR, at its broadest may embrace: both self-reporting by organizations and reporting about organizations by third parties; information in the annual report and any other form of communication; both public domain and private information; information in any medium (financial, non-financial, quantitative nonquantitative). It is not restricted necessarily by reference to selected information recipients; and the information deemed to be CSR may, ultimately, embrace any subject. As if this were not enough, interest in CSR has waxed and waned as researchers have entered and left the field (Parker, 1986); there has been a lack of any agreed theoretical perspective to drive systematic research (Preston, 1983; Ullmann, 1985); the absence of systematic reporting by organizations has made traditional positive research more difficult[2] and CSR continually has
Comments received from colleagues at the Universities of Dundee, East Anglia, Sheffield, Southampton, Canterbury and Otago, at the BAA 1990 National Conference, the EAA 1990 Congress and the BAA 1992 Research Summer School are gratefully acknowledged. The authors are grateful for the help and suggestions from Carol Adams, Jan Bebbington, David Collison, Sid Gray, Roland Kaye, Richard Laughlin, Markus Milne, Ailsa Nicholson, David Owen, David Power and Clare Roberts. Especial thanks goes to Sue Gray who undertook much of the replication analysis reported in the article and to Lee Parker and James Guthrie whose thoughtful comments on the structure of the article were particularly helpful. The financial assistance and advice of the Research Board of the Institute of Charted Accountants in England and Wales on this project are very gratefully acknowledged.

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Accounting, Auditing & Accountability Journal, Vol. 8 No. 2, 1995, pp. 47-77. MCB University Press, 0951-3574

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attracted doubts about its legitimacy as an area of accounting research enquiry (Gray et al., 1987, 1988, 1991; Parker, 1986, 1991). Finally, this very uncertainty and the breadth of possibilities which may constitute CSR have been instrumental in making the subject more explicitly political than either is traditionally the case in accounting research (but see Cooper and Sherer, 1984; Tinker et al., 1982) or accounting researchers are historically equipped to handle (see, for example, Puxty, 1986, 1991; Tinker et al., 1991). Seen in this light, two significantly different approaches to researching CSR have emerged in the literature. First, CSR may be treated as an addendum to conventional accounting activity and researched with the same assumptions and preconceptions which inform much of mainstream accounting research. Such an approach will usually take the financial community as the principal users of any CSR and will tend to limit the perception of social accounting CSR to that which can be articulated within the confines of conventional accounting. This approach, with its severe limitations of scope and efficacy, are discussed in (for example) Gray et al. (1987) and Mathews (1984, 1993). The second alternative approach to CSR places social and environmental reporting at the heart of an examination of the role of information in organization-society dialogue (see for example, Preston, 1975, 1981, 1983). While this latter approach would appear to be generally considered within the conventional accounting literature as being too ambitious, this wider view has been both the source of the major advances in our understanding of CSR and a source of major criticism of the CSR literature. That is, CSRs failure to theorize explicitly the organization-society relationship leaves it both flaccid and immanent (Puxty, 1986, 1991; Tinker et al., 1991; and see also Benston, 1982a, 1982b; Gray et al., 1988, 1991). These charges are difficult to rebut (Parker, 1991). It is not the purpose of this article to attempt to solve these major problems. Our dominant intention is to provide and interpret data about some of the UKs CSR, but we intend to try to achieve this within an explicit recognition of some of the major problems of CSR. To do this, we follow the arguments of Gray, et al. (1987, 1988) that there is a core or mainstream of CSR research which can be (and is being) theorized and does not require the exclusion of any other possible forms of CSR (see also Mathews, 1984, 1993). This core, which generally coalesces around an (under-specified) form of accountability and stakeholder theory (see below), concerns itself, primarily, with self-reporting by organizations (but see Geddes, 1992; Gray et al., 1991; Harte and Owen, 1987). This self-reporting is of information which enters the public domain (but see, for example, Blake et al., 1976; Foley and Maunders, 1977)[3], tends to be reported via the annual report in one form or another (but see Abbott and Monsen, 1979; Gray, V., 1978; Gray, R.H., 1983; Gray et al., 1987; Zeghal and Ahmed, 1990)[4] and predominantly is concerned with organization-society interactions relating to the natural environment, employees, communities and customers[5]. The CSR literature also tends to recognize that such self-reporting may be undertaken voluntarily, as a result of legislation or as part of a code of practice[6].

Although this core CSR literature has been concerned with a wide range of CSR: a review of purposes[7], this article is concerned predominantly with an attempt to describe the literature CSR practice in a particular national context (see, for example, Gray et al., 1987; Guthrie and Mathews, 1985; Guthrie and Parker, 1990; Owen, 1992; Roberts, C.B., 1990, 1991). However, no description is value- or theory-free (Tinker et al., 1982). The description undertaken in this article attempts explicitly to reflect 49 the mainstream of the CSR literature (for semiotic reasons, see Gray et al., 1995) but is theorized (and analysed subsequently) in a (broadly) neo-pluralist framework within which the newer (to accounting and CSR) theories of stakeholder theory, legitimacy theory and political economy theory are articulated. With the above delineation of CSR we can enter the body of the article which is structured as follows. The following section provides an overview of the empirical literature on social disclosure and then attempts to theorize mainstream CSR. Then a very brief introduction is provided to the data collection (this is explained in detail in the accompanying article Gray et al., 1995) and then provides an overview of social and environmental disclosure by UK companies over a 13-year period. The penultimate section then provides some interpretation of these patterns in the context of stakeholder, legitimacy and political economy theories. The last section provides some conclusions and some suggestions on ways forward for CSR research. Empirical findings and theorizing in the CSR literature The 20 years or more of empirical investigation of CSR practice have produced a very wide literature which engages many different theoretical perspectives (explicitly or implicitly (see, for example, Arnold, 1990; Tinker et al., 1991)); employs many different research methods; is motivated by a wide range of research questions; and covers many different countries and time-periods[8]. Despite both the diversity of concerns and approaches in the literature, and the diversity of countries, time-periods and samples selected for investigation, it does seem possible to draw carefully some tentative conclusions about CSR practice. First, CSR would not appear to be a systematic activity. To the extent that it is not covered by regulations, social disclosure seems to wax and wane in popularity, in the subjects to which it gives attention and in terms of the organizations which provide such disclosure. Second, CSR does not appear to be related to profitability in the same period (Abbott and Monsen, 1979; Belkaoui and Karpik, 1989; Cowen et al., 1987; Freedman and Jaggi, 1988; Freedman and Ullmann, 1986; Ingram, 1978; Singh and Ahuja, 1983), although there is some evidence to suggest that it might be related to lagged profits (Roberts, R.W., 1992). Third, CSR does appear to be related to company size. However, this is not the most reliable of results, when no allowance is taken of other factors (see, for example, Andrews et al., 1989; Belkaoui and Karpik, 1989; Cowen et al., 1987; Singh and Ahuja, 1983; Tonkin and Skerratt, 1991; Trotman and Bradley, 1981). Fourth, there is some evidence of industry effects but the studies are not clear or consistent enough to assess exactly what, if any, these

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effects might be (see, for example, Aupperle, 1984; Beresford and Cowen, 1979; Cowen et al., 1987; Freedman and Jaggi, 1988; Roberts, 1990; Singh and Ahuja, 1983; Zeghal and Ahmed, 1990). Fifth, the country in which the organization is reporting and the country of ultimate ownership seem to have a significant effect, (see, for example, Andrews et al., 1989; Guthrie and Parker, 1990; Roberts, C.B., 1990; Teoh and Thong, 1984). If this result proved reliable, it would go some way to explaining inconsistent results between studies in different countries at least (but see Ullmann, 1985). It certainly seems to be the case that the subject of disclosure is both time and country-variant (see, for example, Gray et al., 1987; Guthrie and Parker, 1989, 1990). Finally, there would appear to be a number of characteristics which may be related to predisposition to make social disclosures. These include capital intensity (Belkaoui and Karpik, 1989); age of the corporation (Roberts, R.W., 1992); and such matters as strategic posture, senior executive attitudes and the existence of a social responsibility committee (Cowen et al., 1987; Roberts, R.W., 1992; Trotman and Bradley, 1981). These are tentative conclusions and these arise in part from the lack of explanation as to why these relationships might hold. Indeed, Ullmann (1985) cites the absence of systematic theorizing of CSR as one of the principal reasons for the lack of substantive, systematic conclusions about CSR (see also Mathews, 1987, 1993 and Mintzberg, 1983). This challenge has been taken up in several ways by authors who have attempted to place empirical investigation of CSR in some sort of theoretical context. These attempts may be related to three broad groups of theories concerning organization-society information flows: (1) decision-usefulness studies, (which then overlap with); (2) economic theory studies; (3) social and political theory studies. Decision-usefulness studies CSR has featured as an element in a number of enquiries into the decision usefulness of accounting information. These enquiries are of two types: the ranking studies (which have been so popular from time to time); and the investigation of information effects on share price behaviour. In the ranking studies, analysts, bankers and others are asked to rank various accounting data in order of perceived importance. These data might comprise either those which are received currently or a users wish list. Studies from, inter alia, Belkaoui (1984); Benjamin and Stanga (1977); Chenall and Juchau (1977) and Firth (1978, 1979, 1984) have all suggested that the financial community find CSR better than useless and, indeed, have ranked it in categories moderately important and certainly more important than some issues to which the accounting profession has given considerable attention in the past (but see also McNally et al., 1982, for a contrary view). Other studies have attempted to investigate whether social disclosure is treated as information by stock market participants (see, for example, Aupperle, 1984; Belkaoui, 1980; Bowman, 1973; Buzby

and Falk, 1978, 1979; Holman et al., 1985; Ingram, 1978; Shane and Spicer, 1983; CSR: a review of Spicer, 1978). The results of these studies tend to be inconsistent and/or the literature inconclusive, although Mintzberg (1983) in his review of this evidence suggests that it is possible to conclude tentatively that it pays to be good, but not too good. However, the decision-usefulness approach to investigating CSR has, despite 51 the attempts of Dierkes and Antal (1985), been a largely unsatisfactory one. In part this results from the theoretical problems with decision-usefulness itself (see, for example, Laughlin and Puxty, 1981; Pallot, 1991; Williams, 1987). But the main problem has been that interest in CSR[9] is not motivated predominantly by a concern with the needs, wants and whims of financial participants (see, for example, Booth et al., 1987; Mathews, 1987; Owen et al., 1987). Although there appear to be instances when social and environmental information does influence financial behaviour (see, for example, Epstein, 1991, 1992; and the ethical investment literature see, for example, Harte et al., 1991; Perks et al., 1992), the whole process of information and response is undertheorized and begs too many important questions (see, for example, Cooper, 1988; Owen, 1992). It would be wrong to dismiss this literature as unimportant and inconclusive. However mis-specified and under-theorized it may be, the decision-usefulness literature has had the potentially important effect of raising the visibility of non-financial, non-economic factors in organizational reporting and accountability. It has thereby given a potential to other voices and other discourses which typically are not privileged in accounting research (see, for example, Arrington, 1990; Cooper and Sherer, 1984). Economic theory studies One response to this unsatisfactory CSR literature has been a peripheral emergence of economic agency theory and positive accounting theory studies of CSR (see, for example, Belkaoui and Karpik, 1989; Mak, 1991; Ness and Mirza, 1991; Shane and Spicer, 1983)[10]. In addition to there having been relatively little development of this economic perspective on CSR, the agency theory and positive accounting theory perspectives are highly contestable (see, for example, Arrington and Francis, 1989; Christenson, 1983; Puxty, 1986; Tinker and Okcabel, 1991). While the accounting community clearly has benefited from the methodological pluralism of recent decades, economic theory in the pristine sense in which it normally is applied in accounting research has little or nothing to offer as a basis for the development of CSR. Apart from the intellectual doubts that one must have concerning the approach, its principal tenets of, first, (allegedly) avoiding any concern with what should be and, second, deferring all wisdom to (allegedly free) markets runs entirely counter to principal concerns of CSR which is motivated primarily by the market failures (especially injustices, anti-democratic tendencies, information assymetrics and externalities) and desire to change current practice. In addition, its central assumption that all actions are motivated by a morally

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degenerate form of short-term self-interest (see, for example, Gray et. al., 1994) seems not only empirically implausible but also highly offensive. These issues have been rehearsed widely in the literature reviewed above and need no additional repetition. No further attention is given to these approaches here[11]. Social and political theory studies To our mind, by far the more interesting and insightful theoretical perspectives are those drawn from social and political theory most particularly: stakeholder theory; the legitimacy theory perspectives; and the perspectives that emerge from political economy[12]. It is these approaches which have been informing much of the more penetrating analyses of CSR in recent years (see, for example, Arnold, 1990; Gray et al., 1987, 1988, 1991; Guthrie and Parker, 1989, 1990; Patten, 1992; Roberts, R.W., 1992; Ullmann, 1985). However, the literature has not always developed the distinctions between these theoretical positions as far as it might. It seems appropriate, therefore, to attempt to clarify what is meant by stakeholder, legitimacy and political economy theories when applied to social disclosure. It seems to us that the essential problem in the literature arises from treating each as competing theories of reporting behaviour (see, for example, Arnold, 1990; Guthrie and Parker, 1990), when stakeholder theory and legitimacy theory are better seen as two (overlapping) perspectives on the issue which are set within a framework of assumptions about political economy. Therefore the differences which (for example) Guthrie and Parker (1990) and Arnold (1990) discuss so usefully are differences in levels of resolution of perception rather than arguments for and against competing theories as such. Political economy, in its broadest sense, has a very long historical tradition and is defined variously. The definition from Jackson (1982) seems helpful:
Political economy is the study of the interplay of power, the goals of power wielders and the productive exchange system (Zald, 1970, p. 233). As a framework, political economy does not concentrate exclusively on market exchanges. Rather it first of all analyses exchanges in whatever institutional framework they occur and, second, analyses the relationships between social institutions such as government, law and property rights, each fortified by power and the economy, i.e. the system of producing and exchanging goods and services (p. 74).

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The essential point, it seems, is that the economic domain cannot be studied in isolation from the political, social and institutional framework within which the economic takes place. As such, it seems unquestionably (but see Benston, 1982a) an apposite way of thinking about social disclosure by corporations. CSR is generally predicated on a recognition that the economic (as represented by the financial) is only one element of organizational life and this needs to be (at a minimum) supplemented by or (preferably) interwoven with recognition of the social and political. To this extent there is little in the way of a problem. However, following Marx, it becomes necessary to distinguish between bourgeois (or vulgar) political economy (which is most usefully associated with J.S. Mill and those who followed him) and classical political economy (see, for example, Abercrombie

et al., 1984; Held, 1980; Macpherson, 1973, 1977; and, obviously, the writings of CSR: a review of Marx see, for example, Bottomore and Rubel, 1961). Indeed, some of the the literature confusion in the accounting literature may well stem from this distinction because, as Abercrombie et al. (1984) remark, political economy has become code for Marxism, whereas, in its accounting applications, it is often used in its bourgeois formulation (Arnold, 1990). 53 The distinction is crucial because Marxian political economy places sectional (class) interests, structural inequity, conflict and the role of the State at the heart of its analysis. Bourgeois political economy largely ignores these elements and, as a result, is content to perceive the world as essentially pluralistic. This, it seems to us, is the essence of the conflict between the Tinker et al. (1991) Marxian critique of the bourgeois pluralism of Gray et al. (1987, 1988) and the Arnold (1990) Marxian critique of the Guthrie and Parker (1990) (predominantly) bourgeois interpretation of political economy. These two points of view are essentially different ways of looking at the issues (Held, 1980) and are, fundamentally, irreconcilable in that the bourgeois perception treats as important issues which the Marxian analysis will see as relatively trivial. The bourgeois perception is exercised by relationships between the interest groups of pluralism without explicit recognition of the way in which the forces of the system (capitalism) construct the self-interests as group interests (Tinker, 1984). As Tinker notes (1984, p. 70), structural conflict may be mediated, modified and transformed within the system but the bourgeois perception, in its higher level of resolution, treats these mediations as the whole of the story while ignoring the processes that created this mediation and whether, indeed, the mediation and transformation are actually significant in developing the relationships between the structural (class) interests. It is in this context that stakeholder and legitimacy theory can, perhaps, be seen more clearly as they are both concerned with this mediation, modification and transformation but from different points of view. Stakeholder theory is (typically) explicitly bourgeois in that the world is seen from the perspective of the management of the organization who are concerned strategically with the continued success of the company. This is perhaps best expressed in Ullmann (1985) and Roberts, R.W. (1992). From this perspective, the corporations continued existence requires the support of the stakeholders and their approval must be sought and the activities of the corporation adjusted to gain that approval. The more powerful the stakeholders, the more the company must adapt. Social disclosure is thus seen as part of the dialogue between the company and its stakeholders and, as Roberts, R.W. (1992) observes, CSR has been a relatively successful medium for negotiating these relationships. Indeed, from the perspective of the organization, there is much to recommend this approach to theorizing the organization-society relationship. While it may be a simpler choice to assume that all such stakeholder approaches are driven by a manipulative cynicism on the part of the corporation, this need not be so[13]. However, from the Marxian perspective such analysis still fails to address the

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central systemic issues that initially construct the relationships or, indeed, to recognize the structural inequities in the relationships[14]. Much of legitimacy theory can be seen in the same light. The clearest exposition is probably that of Lindblom (1994) who argues that we must first distinguish between legitimacy which is a status or condition and legitimation which is the process underlying that state. She defines legitimacy as:
a condition or status which exists when an entitys value system is congruent with the value system of the larger social system of which the entity is a part. When a disparity, actual or potential, exists between the two value systems, there is a threat to the entitys legitimacy (p. 2).

Lindblom then proceeds, in a carefully argued analysis, to identify four strategies which a corporation seeking legitimation may adopt. First, the organization may seek to educate and inform its relevant publics about (actual) changes in the organizations performance and activities. (This strategy is chosen in response to a recognition that the legitimacy gap arose from an actual failure of performance of the organization.) Second, the organization may seek to change the perceptions of the relevant publics but not change its actual behaviour. (This strategy is chosen as a response when the organization sees that the legitimacy gap has arisen through misperceptions on the part of the relevant publics.) Third, the organization may seek to manipulate perception by deflecting attention from the issue of concern to other related issues through an appeal to, for example, emotive symbols. (This strategy is chosen on the grounds of manipulation. One illustration is when a company with a legitimacy gap regarding its pollution performance chooses to ignore the pollution and talk instead of its involvement with environmental charities, etc.) Fourth, the company may seek to change external expectations of its performance. (This strategy is chosen when the organization considers that the relevant publics have unrealistic or incorrect expectations of its responsibilities.) As Lindblom demonstrates, social disclosure can be employed in each of these strategies. Legitimacy theory, in many of its applications in the CSR literature, does reflect a bourgeois political economy (see, for example, Preston and Post, 1975). That is, it concerns itself with organization-society negotiation in a pluralistic world. However, its application by (for example) Patten (1992), to a greater extent by Guthrie and Parker (1989), and, most especially, by Hogner (1982) is concerned with systemic responses as well as intra-system mediations and, thus, takes us beyond a simple bourgeois political economy. That is, within a classical political economy perspective we might find interest in attempts to maintain legitimation of the system as a whole, attempts to intervene in the States role in mediation (Arnold, 1990) and, especially, in attempts to redefine and/or renegotiate elements of the hegemony (or at least the language and symbols thereof). Indeed, Lindbloms (1994) careful use of the term relevant publics rather than any more widely-employed term (such as users or stakeholders) suggests a recognition of the classical political economy possibilities of her analysis.

The apparently clear distinction between classical and bourgeois political CSR: a review of economy with its implications for legitimacy and stakeholder theory while the literature a useful dialectic is not necessarily helpful in reading a story from data. We are much persuaded by Helds (1987) construction of neo-pluralism as a partial meeting place for Marxism and liberalism (see also Macpherson, 1977). The neo-pluralist conception recognizes that power will be distributed unevenly, 55 that there will be conflict of interests (possibly structural) and that the focus of observation (e.g. observable corporation-society interactions like CSR) may, indeed, take place within a captured or controlled system even if the capture or control is perhaps not identifiable with any sectional or class interest or, indeed, any interests at all (see, for example, Marcuse, 1955, 1964). The conception is thus a dynamic one but and it is an important but it is a conception which does not prescribe where the power lies, nor does it prescribe that there are any predetermined battle-lines along (for example) class boundaries. It thus permits the possibility that power and structure in society are, ultimately, not empirical issues but matters of faith and belief albeit faith and belief which are informed by argument and other forms of evidence. Thus, it seems to us, it is possible to make compatible interpretations of evidence from these different theoretical perspectives. That is, if our interpretations from stakeholder and legitimacy theory are made in a neo-pluralist vein, with explicit recognition of the (potentially) relatively narrow explanation that these can offer, and these interpretations are augmented by wider perceptions from classical political economy, one should end up with a set of observations which are persuasive at different levels of resolution. We can illustrate this by bringing the discussion back to empirical domain. It should be apparent that we, in common with much of the CSR literature, have little difficulty in defining CSR in the same way as Neimark (1992, p. 100) defines accounting. That is, we see CSR as:
forming part of the symbolic universe of language, signs, meanings, norms, beliefs, perceptions and values, through which individuals and institutions define themselves and are defined by others Companies use their accounting [CSR?] to construct themselves and their relationships with others as they strive to create and maintain the conditions for their continued profitability and growth.

Further, we can concur with Lehmans (1992, p. 19) reconstruction of Hursts (1970) argument that:
accounting [CSR?] serve[s] to rationalise and justify the corporate entity by not merely describing effective management, but legitimizing corporate power and maintaining confidence.

These are precisely the concerns of the bulk of the literature reviewed above. Furthermore, we find Arnolds (1990) argument that regulated social disclosure might be interpreted as evidence of counter-hegemony and as potentially serving the interests of subordinate classes and social movements (p. 180) as especially helpful. Finally, the periodization analysis offered by Lehman (1992) and Tinker et al. (1991) offers much for the interpretation of CSR practice. The period covered by this article (1979-1991) includes the end of the decade of

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the 1970s when the UK labour movement had seemed at its strongest, followed by the Thatcher decade in which (inter alia) there seemed to be an attempt to instigate a renegotiation of company-labour relations (the capital-owning democracy) and a redefinition of the roles of the corporation and the market in community functions undertaken traditionally by the State. Finally, the period concludes with late 1980s and early 1990s when environmental issues offered the promise of a new hegemony. These, and other, interpretations are possible within a classical political economy perspective on CSR practice. However, as Puxty (1986, 1991) has argued, CSR may be little more than the crumbs of legitimation dropped from the table of powerful corporations. Indeed, much CSR may have little to offer except by default in developing our understanding of political economy. In such a context, we do not find the possibilities offered by legitimacy theory and stakeholder theory to be entirely trivial. The development of employee and employment reporting in the UK in the 1970s had important consequences (see, for example, Maunders, 1981, 1982, 1984), the worldwide response by the oil and chemical industry(ies) to disasters such as Exxon Valdez and Bhopal was something more than trivial (see, for example, Patten, 1992) and the extensive environmental debate of the 1990s especially throughout Europe represented, at a minimum, a new discourse and a new balance to accepted organizational reality (see, for example, Smith, 1993). However, whether we could interpret such events as mediating the systemic structures of the organization-society relationship (political economy), as readjustments by elements of the capitalist machinery (legitimacy theory) or as attempts by corporations to control their environment (stakeholder theory) is a moot question[15]. We return to these possibilities after examining the data derived from the 13 years of UK corporate social disclosure. UK social and environmental disclosure The data reported here were collected using content analysis of UK company annual reports over a period of 13 years stretching from the beginning of the Thatcher regime in Britain (1979). The details of the data collection and further information about the data availability are given in the accompanying article (Gray et al., 1995). The format of the data is summarized in the Appendix. The data reported here is a summary of the data collected and provides an overview of UK company reporting practices over the period[16]. Throughout the period, all companies had some CSR which consisted of, at least, some employee-related disclosure comprising, at a minimum, data relating to employment figures and/or pensions. Figures 1, 2 and 3 provide some information on the percentage of the companies throughout the period which disclosed in different areas of CSR. Figure 1 shows the general rise in the proportions of companies disclosing. By the end of the period all of the UKs largest companies disclosed some mandated information (in addition to the employment data and pensions data) and some voluntary information. (The effect of a change in the sample is

100 90 Percentage of sample 80 70 60 50 40 30 20 10 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

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Key :
Voluntary Customer Mandatory (ex) Community Environmental

Figure 1. Social disclosure by UK companies

striking in Figure 1 shown by the vertical line in this and all following graphs and suggests strongly the presence of size-effect in CSR practice. See [16] and Gray et al., 1995; for more detail.) Employee-related disclosure was clearly the most popular subject on which to report but disclosure relating to the community (typically charitable donations) was also widely practised. In addition, environmental disclosure rose significantly throughout the period and was no longer a marginal activity after the mid-1980s. Figure 2 shows the pattern of compliance with areas of mandated CSR. The general pattern of compliance (some companies anticipating the regulation, some delaying compliance) is similar to that reported in other studies of compliance with accounting regulations (see, for example, Perks and Butler, 1977; Weetman, 1977). Only on pensions data (and employment data, which are not shown in Figure 2) does disclosure reach 100 per cent. No size effect is apparent for disclosure of consultation with employees. A potentially perverse size effect is suggested for disclosure relating to charitable donations, ESOPs (employee share ownership schemes) and information relating to the employment of the disabled. A small but steady proportion of companies provide disclosure of involvement in South Africa. Figure 3 shows the equivalent percentage disclosure rate for voluntary subject areas. (Two areas of voluntary disclosure are not shown in Figure 2. Disclosure relating to customers is shown in Figure 1. Disclosure of value added statements follows the pattern demonstrated by Burchell et al., 1985; in that it declines steadily from a level of 40 per cent of companies in 1980 to around 6 per cent of companies in 1991.) The overall pattern of increasing disclosure suggested by the mandate disclosure is repeated for voluntary disclosure. This pattern is most notable for disclosure relating to community, environmental

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Percentage of sample

100 90 80 70 60 50 40 30 20 10 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

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Figure 2. Social disclosure in mandatory subject areas

100 Proportion of sample disclosing 90 80 70 60 50 40 30 20 10 0

Key :
Pensions ESOPs Consultation Charity Disabled employees South Africa

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

Figure 3. Social disclosure in voluntary subject areas

Key :
Environmental General other Energy Health and safety Community Employee other

issues and health and safety. The pattern for employee other is not especially clear (particularly if adjustment is made for the size effect) and seems to be composed of several factors. The growth from the mid-1980s is due largely to a rise in disclosure of data on equal opportunities. There is also a suggestion that levels of redundancy in the earlier years of the sample hold a direct relationship with levels of employee other disclosure. The nature of the disclosure in this category also changed over the period. While statistics on employment and

expressions of thanks to staff remained popular, the incidence of redundancy CSR: a review of declined as the 1980s progressed and was replaced by an increasing emphasis the literature on training and equal opportunity-related material. Finally, taken as a whole, the data in Figure 3 offer a strong suggestion for a size effect in all areas except health and safety. While the broad patterns of trends in disclosure remain, a somewhat different 59 story is told by the volumes of disclosure shown in Figures 4 to 7. Figure 4 describes the trends in social disclosures in the four broad categories of employees, environment, community and customers. The dominance of, and steady rise in, employee-related disclosure is striking. The rises in community and environmental disclosure are notable, although in both cases the related disclosure is less than a page of the annual report. Customer-related disclosure remains very low. The data on all areas are also supportive of a size effect. Figure 5 reflects the steady growth in the volume of total CSR throughout the period. There has been a steady, but not dramatic, increase in mandatory disclosures largely reflecting changes in disclosure regulations (for employment data and pensions and for other areas of disclosure). There has also been a fourfold increase in voluntary disclosure over the period but some of this, as with the mandated disclosure, is probably due to the size effect in the sample. The rise in average volumes of disclosure of mandatory subjects is, during the early years, attributable to the rise in the proportion of companies disclosing (see Figure 2). With that in mind, the volume of disclosure of consultation with employees, charitable donations and the employment of the disabled is virtually stable throughout the period. However, the volume of disclosure from those companies which do disclose has risen for employment data, ESOPs and pensions (see Figure 6). Some of this disclosure may thus be interpreted as voluntary in that it is above the minimum required. The later fall in employment
3.5 Average pages disclosed 3.0 2.5 2.0 1.5 1.0 0.5 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

Key :
Environmental Customer Community Employees

Figure 4. Volume of disclosure by subject area

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Average pages disclosed

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

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Figure 5. Volume of social disclosure by UK companies

Key :
Voluntary Mandatory (ex) Mandatory (+) Total corporate social report

1.4 1.2 Average pages disclosed 1.0 0.8 0.6 0.4 0.2 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

Figure 6. Volume of disclosure in mandatory subject areas

Key :
Employment data Disabled employees Pensions ESOPs Consultation Charity

data may possibly be interpreted as a compensation for the rise in pensions and ESOPs disclosure. (This issue of compensation is returned to below.) With the exception of employee other (which we have discussed above) the voluntary areas of disclosure were largely unremarkable until the mid-1980s (see Figure 7). The exception to this is the community-related disclosure which started a slow rise from 1980 and, even allowing for a size effect, showed a

0.9 0.8 Average pages disclosed 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

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Key :
Environmental General other Energy Health and safety Community Employee other

Figure 7. Volume of disclosure in voluntary subject areas

remarkable growth in the late 1980s and early 1990s. In part this is explained by the increased percentage of companies giving attention to the issue (see Figure 3) but the volume of disclosure by those companies which disclosed also showed a steady rise from a few lines in 1980 to around three-quarters of a page in the early 1990s. Health and safety data also showed a small but steady upward trend during the later part of the period once again this trend remains, even when adjustment is made for a size effect and the dilution caused by less than 100 per cent of companies disclosing in this area. The most striking rise is obviously environmental disclosure which has grown inexorably from the late 1980s[17]. Energy and general other (which includes missions statements and statements of social responsibility, for example) have remained marginal areas of disclosure. Taken across the whole of the sample period it seems that we can divide the period somewhere around 1985/86. Up until this time, the volume of voluntary disclosure remained virtually constant. As a new issue arose it appeared to replace an older issue. After 1986 this remained true for only some areas. So while a decline in value added statements may be compensated by a rise in health and safety disclosure, a concern for redundancy replaced by a concern with training and equal opportunities, and (possibly) a rise in ESOP disclosure replacing a disclosure in employee other, the rise in community and environmental disclosure is quite unprecedented. The next section attempts to provide some interpretation of these trends and observations. Interpreting the trends in UK social disclosure At a general level, the most striking factor to emerge from the trends considered above is the rise in both the proportions of companies disclosing and the range

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of that disclosure. At the end of the 1970s, UK CSR was typified by approximately a page of employee-related disclosure plus disclosure of charitable donations. The employee-related disclosure was dominated by employment data plus employee other disclosures (predominantly thanks to staff, discussion of redundancy and, less frequently, longitudinal statistics on employment rates and employee turnover). To this was added a somewhat patchy disclosure of employment in South Africa and information about pensions. By the early 1990s, while employee-related disclosure still dominated UK CSR, that disclosure covered a wider range of employee-related matters. In addition, community and environmental disclosure had grown significantly. Put in broad terms, between 1979 and 1991, total UK CSR rose by over four times, employee-related disclosure fell from approximately 90 per cent of total to about 78 per cent, and community and environmental reporting rose from approximately 10 per cent to 32 per cent of total disclosure. Customer-related disclosure remained at a very low level. The only area of CSR which fell systematically was the disclosure of the value added statement. Such an overview lends support to two of the tentative conclusions suggested by the CSR literature discussed above. That is, the subjects of CSR change over time and the size of companies, in the UK at least, appears to be an important factor for most areas of voluntary CSR (we return to this latter point below). There is, however, more to be gleaned from these data by an examination through the lens(es) of political economy, legitimacy and stakeholder theories. From the point of view of classical political economy, the period considered here was one in which the Conservative party formed the government throughout. During this period, the Conservatives sought explicitly to roll back the state and develop a capital-owning democracy under the banner of liberalization and privatization. This was a political agenda which sought explicitly to redefine the employee-employer relationship (reducing the influence of trade unions and encouraging workforce participation in the running and ownership of the business) and to pass the traditional (British) welfare functions of the State back to the market. There was thus a major attempt to renegotiate the organization-state-society-employee relationship. Business was asked by government (and seemed enthusiastic in its response) to take on (as custodians of wealth creation and the marketplace) additional responsibilities previously undertaken by state agencies. The State passed laws to encourage disclosure of the employment of the disabled, to encourage consultation with employees and wider share ownership. The companies responded with a greater involvement with the community in schools, in business-in the-community schemes and so on. Despite the increase in laws designed ostensibly to improve the conditions and dignity of employment, this was a massive attempt to redress the counter-hegemony (Arnold, 1990) which had built up during the 1970s (see Gray et al., 1987, 1988; Harte and Owen, 1987). Business, and what business thought, were the determinants of orthodoxy. The State was explicitly active in supporting this re-empowerment of capital.

This is the story told by the patterns of social disclosure by UK companies. CSR: a review of A new panoply of issues is now essential to business and its new, more liberal the literature role in post-industrial Britain. The annual reports reflect this in wider disclosure of share-ownership schemes, consultation with employees, training, equal opportunities and higher community involvement, while the old confrontational disclosure areas the value added statement and trade union 63 disclosure quietly fade away. UK CSR does appear to offer a plausible reflection of changes in the political economy of Britain. But the CSR data can tell us rather more than this. Note that the legislative areas of disclosure divide neatly into those which encouraged minimum disclosure (employment of the disabled, consultation with employees and, to a lesser extent, employment in South Africa) and those which led to voluntary disclosure beyond minimum compliance (ESOPs, employment data and, later, pensions). This suggests to us that we can read these disclosure developments very much in line with Arnold (1990) and Tinker et al. (1991). That is, while widening the (workplace) franchise to include the disabled (it is worth noting that equal opportunities is not a legally required area of disclosure) and ostensibly encouraging greater involvement of the workforce in the running of the business, these issues, as indicated by CSR, were not important matters to business[18]. ESOPs were important matters to business. Disclosure here rose above the minimum, as did disclosure on pensions and employment data. Why disclosure of these latter issues rose we find difficult to assess within this context (but see below) but the point to be made is that companies are capable of extending their social disclosure when it matters to them. They did not do so on consultation with employees. Furthermore, the rise in the emphasis on ESOPs has two potential elements as far as we can assess. First, the new language of Mrs Thatchers capital-owning democracy required evidence of a widening of the capitalist franchise. It was essential that a wide proportion of employees (and potential Conservative voters?) were encouraged to switch allegiance from unions to management, from labour to capital. Second, it was also essential that the State could point to evidence concerning this in support of their radical, liberal programme. Business responded by creating employee share ownership schemes and publicizing them in the annual report. This is, however, only one part of the possible explanation. We will return to this below. Finally, it seems pertinent to observe that, despite the rhetoric concerning the need to reorientate business towards the customer and customer needs which was so prevalent in the 1980s, this does not appear to have been a factor by which UK business was much exercised. CSR on this subject stayed low throughout the period. The foregoing paragraphs are derived from our understanding of classical (or Marxian) political economy in which we have attempted to take the criticisms of the bourgeois political economy to heart. It is our judgement (in retrospect) that those criticisms were well-founded in that we find the above analysis both plausible and offering important insights into the hegemony of

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Britain, its business community and the State. To derive such an analysis from political economy argues (to us) that Marxian perspectives do indeed have important interpretations to offer of CSR practice. However, there are other, apparently significant trends in the data we have reported here which, while they do not conflict with a classical political economy perspective, are not easily explained by it. In line with our earlier contention, we believe that it is necessary to sharpen the level of resolution, within a political economy perspective. That is, many of the trends are better understood from a (principally, more bourgeois analysis of) legitimacy theory and stakeholder theory perspective. Looking first at the mandatory areas of disclosure for which we were unable to offer satisfactory political economy explanations, Lindbloms (1994) four strategies of legitimation offer interesting insights. While part of the trends we observed in ESOPs disclosure could be understood as a reflection of political economy, there is another potential side to this story. In collecting the CSR data for this project we explicitly excluded all share ownership schemes or share options schemes which were defined as only for directors or senior management[19]. It is perfectly plausible, given the way in which ESOPs are reported that the bulk of the employees who own the shares and options in the ESOPs are, despite the title of the scheme, directors and senior management. Therefore, the reporting of ESOPs may not be entirely about the widening of the capitalist franchise but, rather, about an attempt to justify a redistribution of income from other stakeholders to the directors and senior management. This would fit into Lindbloms third strategy of distracting attention from the two principal matters of, on the one hand, encouraging wider employee involvement and, on the other, of increasing director remuneration through a legitimate (but implicit) process of share options and share ownership. More speculatively this distracting of attention strategy may help explain the increased emphasis on the disclosure of employee data and employee other. That is, as the levels of unemployment and redundancy grew in the UK during the early 1980s, casual observation would have suggested that the bulk of the polity was unconcerned in general unemployment and redundancy were a working class (traditional Labour voter) phenomenon. As the incidence of unemployment spread to white-collar workers more concern was voiced over company behaviour in this field. Attention could be distracted by an emphasis on the quality of the employment offered to those with employment. Such a strategy could then be developed by companies to merge into Lindbloms fourth legitimation strategy of changing expectations. In this sense, companies were now disowning their responsibility for unemployment and emphasizing their responsibility for those in employment. The issue of pensions disclosure (again, somewhat speculatively) was probably a different matter consisting of two separate elements. The late 1980s in the UK saw two separate phenomena developing around company pension funds. The first related to pension fund adequacy, the quality of the management of the funds and, by contrast, an increased awareness of companies taking pension holidays for reasons of either over-provision of funds or income

smoothing in the company itself. The second phenomenon related to an CSR: a review of increased concern over pension fund impropriety of which the most notorious the literature case is that relating to Robert Maxwell. Within the financial community, companies would, therefore, find themselves needing to justify and legitimate their competence, activities and authority over these funds. Such a situation might best be thought of as relating to Lindbloms second legitimation strategy of changing perceptions to encourage financial participants that companies 65 were indeed competent to manage pension fund issues. Legitimacy theory also has some insights to offer concerning the trends in environmental, health and safety, energy and customer disclosure. The international rise in environmental disclosure has widely been commented on (see, for example, Gray, 1993; Gray et al., 1993) and Patten (1992) has linked this in the petroleum industry with a concern with legitimation. The rise in the environmental agenda could be seen as the development of a new element of business-society hegemony. The British governments preference to leave the matter to the market and business could be interpreted as a continuation of the changes in political economy that we have observed above. There is some, circumstantial support for this view at a global level (see, for example, Gray et al., 1993) in that elements of capital have, indeed, attempted to capture the environmental (and, especially, the sustainability) debate. This is less apparent in the environmental disclosures we have examined. The tone, orientation and focus of the environmental disclosure accord much more closely with Lindbloms first, second and third legitimation strategies. A significant minority of companies found it necessary to change their actual performance with respect to environmental interactions (Lindbloms first strategy) and use CSR to inform their relevant publics about this. Similarly, companies environmental disclosure has also been an attempt, first, to change perceptions of environmental performance to alter perceptions of whether certain industries were dirty and irresponsible (Lindbloms second strategy) and, second, as Lindblom notes, to distract attention from the central environmental issues (the third legitimation strategy). Increasingly, companies are being required to demonstrate a satisfactory performance within the environmental domain. CSR would appear to be one of the mechanisms by which the organizations satisfy (and manipulate) that requirement. The growth in health and safety disclosures over the period had not been identified previously in the CSR literature (but see Chan, 1979). It seems to have been associated with, first, the general rise in environmental concern and, second, more pertinently, a rise in the number of major, widely publicized accidents involving loss of life (see, for example, Smith, 1993). As with the rise in environmental disclosure, there is an element of this increased disclosure which could be interpreted as additional support for the political economy perspective considered above. That is, we could interpret the disclosure as evidence of the State pulling back from the regulation of the workplace and leaving the matter to companies. While we are convinced that there may be an element of this, we are more persuaded that companies were increasingly under pressure from various relevant publics to improve their performance in the

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area of health and safety and employed CSR to manage this legitimacy gap. That is, while the disclosure did not, as such, demonstrate improved health and safety records (lack of previous information makes such assessment impossible), it did paint a picture of increasing concern being given by companies to the matter of protecting and training their workforce. This disclosure then helped add to the image of a competent and concerned organization which took its responsibilities in this field seriously. As such, health and safety disclosure appears to be a strong illustration of Lindbloms second legitimation strategy changing perceptions. The very low incidence of both energy and customer disclosures throughout the period can also be seen in a legitimacy framework. That is, despite the rhetoric throughout the mid-1980s (relating to the supremacy of the customer in a quality-seeking organization) and during the late 1980s and early 1990s (concerning the need for and economic advisability of energy efficiency), neither of these issues, apparently, became a matter over which the companies competence or behaviour was actually called into question. Whether this was because the relevant publics saw that companies had maintained their legitimacy here or, more likely, the relevant publics were not exercised by the issues is a matter for speculation. On our evidence, energy and customers were not legitimacy issues during this period. So, finally, increasing the level of resolution still further, can stakeholder theory offer any insights which can enrich what has already been gleaned by interpretations above? Stakeholder theory is a strictly organization-centred perception and, as such, one is forced to attempt an inference of company motive from trends in social and environmental disclosure. Furthermore, as we have already discussed above, it is often unclear in the empirical domain where stakeholder theory ends and legitimacy theory begins (see Guthrie and Parker, 1989, 1990; Patten, 1992; Roberts, R.W., 1992). However, there is some evidence (see Gray et al., forthcoming) that environmental disclosures were being used by companies as an attempt to negotiate the concept of environment, and to determine the companies relationships with society in general and the environmental pressure groups in particular. This is consistent with an organization seeking strategically to manage a new and emerging issue with its stakeholders while attempting to assess the extent of the power of those stakeholders (see, for example, Roberts, R.W., 1992). Stakeholder analysis also, it seems to us, offers a plausible explanation of the tendency, in certain areas of disclosure, for the company to operate a system of compensation in which, as a new issue rises, the disclosure on an older (and negotiated issue) declines. The two examples which seem more obvious are the decline in disclosures concerning redundancy and industrial relations while data on training and equal opportunities rose; and the decline in disclosure on value added while those on health and safety rose. Other, more limited, compensations are hinted at in the data. From a stakeholder point of view, this behaviour would be consistent with a company managing its environment across a relatively narrow front of dominant issues. Such an interpretation is, also, commensurate with the arguments of Roberts, R.W. (1992).

It is apparent to us that CSR practice is a complex activity that cannot fully CSR: a review of be explained by a single theoretical perspective or from a single level of the literature resolution. The 13 years covered by this article have seen major changes in the disclosure practices of UK companies which, individually and collectively, offer insights into corporate behaviour and the role(s) that social disclosure plays in that behaviour. There is little doubt in our minds that other theoretical analyses from different levels of resolution could offer other observations about the 67 development of UK social reporting practice. To our way of thinking, if such observations augment the attention given to an increasingly widespread and complex activity and thereby recognize the legitimacy of a wider range of voices in corporate activity, then positive and worthy steps have been taken to attempt to challenge the current corporate hegemony and to expand the perspective of conventional accounting. Conclusions, summaries and future work From a theoretical point of view, this article has been something of a recanting of bourgeois political economy. We are persuaded that Arnold (1990) and Tinker et al. (1991) have made telling criticisms of the prior interpretations of CSR practice. In particular, there are aspects of developments in UK disclosure practices which are interpreted more intelligently in the wider framework of classical political economy. In this sense, we now accept Arnolds point that Guthrie and Parkers (1990) attempt to classify CSR as simply reactive or proactive is too simple. But, equally, we are convinced that some elements of CSR are bourgeois and must be interpreted as such even if such mediations within the elements of capitalism might be thought to be relatively trivial from some points of view. As such, if the lower level of resolution of political economy is accepted then the different theoretical perspectives need not be seen as competitors for explanation but as sources of interpretation of different factors at different levels of resolution. In this sense, legitimacy theory and stakeholder theory (for example) enrich, rather than compete for, our understandings of corporate social disclosure practices. This, we believe, goes some way towards helping resolve the difficulties that Guthrie and Parker (1989, 1990) experienced in interpreting their very rich data sets of CSR. On an empirical level, the data reported here clearly have demonstrated a significant change in social disclosure behaviour throughout the period. The interpretations we have offered for these trends are, inevitably, speculative and further research needs to be undertaken on this longitudinal basis. Indeed, the data set underlying the evidence reported here contains far more detail than we have been able to report in one article (see Gray et al., 1995, for more detail). Further, more focused examination of these data is likely to prove illuminating, while additional years (beyond 1991) should help resolve the extent to which certain of the patterns we have identified here are, indeed, trends. Finally, given the attention we have paid to the Marxian project and, in particular, to the Marxian challenges to the (typically) bourgeois analysis of social accounting researchers, it seems appropriate to offer a final piece of evidence which lends dramatic support to a Marxian perspective. Figure 8

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60 50 40 30 20 10 0

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Figure 8. UK company social disclosure in context: contents of the annual report relative amounts of information

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Years

Key :
Total annual report Total corporate social report Voluntary disclosure Statutory accounts Mandatory disclosure

reports the average number of pages given in annual reports to various broad categories of information. Puxty (1986, 1991), inter alia, has argued that CSR is, at best, a marginal activity in company practice. Figure 8 supports his contention. Statutory accounting has risen from about 18 pages to a little over 20 pages during the review period. Other areas of discretionary disclosure employed by companies (especially large companies) has risen from over ten pages to nearly 30 pages in this time period. The rise of social disclosure from a little over one page to nearly four-and-a-half pages, it could be argued, may not be something we should get too excited about. Regardless of ones point of view, the data in Figure 8 demonstrate adequately that social and environmental performance is still a relatively low priority for companies. This is not really a contentious issue. The questions for researchers are, first, whether, through increasing the attention given to this marginal activity, the importance of CSR can be raised and, second, whether this will offer any opportunities for the development of counter-hegemony. This is a political judgement. An active involvement with CSR suggests one conclusion to that political judgement; the activities of the classical political economists suggests another. Vive la diffrence.
Notes 1. Corporate social and environmental reporting has many virtual synonyms including corporate social (and environmental) disclosure, social responsibility disclosure and reporting and, even, social audit. The principal terms used here are corporate social reporting (CSR) and corporate social disclosure. We do not (consciously) consider any differences in nomenclature to be important in this article and generally consider environmental reporting and disclosure to be one facet of social reporting and disclosure.

2.

3.

4.

5.

6.

7.

8.

However, see, Parker (1986) and Mathews (1984, 1993) for discussion of other interpretations of the terminology. The alleged shortage of observable practice has been compounded by the paucity of easily accessible/computer readable data on CSR. Only in the USA has such general CSR data been available (through the Ernst and Ernst studies 1976 et seq.) and this source ceased in 1978. It has been argued that easily available data are a major influence on the likelihood of a subject becoming a major area of empirical research (see, for example, Cargile and Bublitz, 1986). It is common to distinguish various stakeholders in the public domain typically, financial stakeholders (investors and the financial community), customers, employees and local communities. There are serious dangers in such a limited conception of public (Gray, 1992; Tinker et al., 1991). We deal with the simple-minded pluralism of this below. Strictly speaking, any disclosure located in the annual report might be considered to be addressed to investors and, thus, not strictly a public document. The annual report is considered widely to be a major formal document which acts as a significant presentation by an organization and has a major influence on perceptions of it. It also has the major advantage of permitting recognition of the potential for conflict between the organization as a financial entity and the organization as a social or environmental entity. Such conflicts are central to CSR (Mathews, 1987; Owen et al., 1987). While not ignoring other forms of communication from the company, this study follows the lead of most CSR literature and concentrates on the annual report. The very emergence of such categories reflects inevitably implicit assumptions and conceptions of the world and society/business interactions. The absence of specific reference to company political action and/or lobbying, to LDC involvement, social responsibility and advertising, is an indicator of implicit omissions which, inevitably, suggest the implicit nature of the theory which determines the inclusions. Nevertheless, most of what passes for mainstream CSR can be captured in some way in these categories and their related subcategories (see Gray et al., 1995). There are obvious differences between these motivations that will affect how the resultant CSR is interpreted. The other reasons for recognizing the differences include enabling more pertinent international comparisons (Guthrie and Parker, 1990) and to interact with other studies which explicitly are concerned with either response to mandated disclosure (e.g. Perks and Butler, 1977) or an examination of voluntary disclosure (e.g. Meek and Gray, 1989). These include: definition of CSR (see, for example, Mathews, 1993; Parker, 1986); the purpose(s) of CSR, its legitimacy and its effects, (see, for example, Benston, 1982a, 1982b; Parker, 1986, 1991; Puxty, 1986, 1991); exploration of why CSR does (and does not) come about, the motivations and expectations of the reporting entities, (see, for example, Filios, 1985; Jones, 1990; Mintzberg, 1983); statistical analyses of CSR and its relationships (if any) with corporate financial performance, other corporate factors and/or share price performance (see, especially, Belkaoui and Karpik, 1989; Cowen et al., 1987; Ullman, 1985); and radical critiques from both Marxist/Critical Theory and pristine Liberal Economic Democracy perspectives (see, for example, Benston, 1982a, 1982b; Puxty, 1991; Tinker, 1985; Tinker et al., 1991). The CSR research literature generally is dominated by USA investigations (see, for example, Ullmann, 1985) but there is also extensive literature on the UK (see, for example, Gray et al., 1987), Australia (see, for example, Guthrie and Mathews, 1985; Guthrie and Parker, 1989; Kelly, 1981; Trotman and Bradley, 1981) and New Zealand (see, for example Guthrie and Mathews, 1985; Robertson, 1978). Evidence is also available from, inter alia, Canada (Brooks, 1986; Maxwell and Mason, 1976; Zeghal and Ahmed, 1990), Malaysia and Singapore (Andrews et al., 1989; Teoh and Thong, 1984), Germany (Brockoff, 1979; Dierkes, 1979; Dierkes and Coppock, 1978), Sweden (Ljung and Oftedal, 1977), Mexico (Chow and Wong-Boren, 1987), Japan (Yamagami and Kokubu, 1991) and India (Maheshwari, 1992; Singh and Ahuja, 1983). And see also Lessem (1977), Preston et al.

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9.

70

10.

11.

12.

13.

14.

15.

(1978), Schreuder (1979), Guthrie and Parker (1990), Roberts, C.B. (1990, 1991, 1992) and UNCTC (1992) for some comparative studies. In addition to country differences, Parker (1986) and Guthrie and Parker (1989) have identified that attention also needs to be given to the time dimension and that both disclosure practice and researchers interest and focus are not time-invariant. This refers to interest among academics, although there is a high probability that this might also be true of the motivations of corporate management with respect to CSR. The reasoning offered by such authors for the value of such studies mirrors those alleged arguments offered in the mainstream accounting literature. That is the authors offer economic agency theory and positive accounting theory as a scientific locus of truth a status which other (softer and underspecified) approaches (allegedly) cannot (or do not wish to) claim. In one sense it is difficult to address seriously this literature because we are wholly convinced by the criticisms of it. So much so that we are unable to see what possible claims to truth it can hold legitimately. It is therefore difficult to address sensibly something which one believes to be virtual rubbish. Indeed the Messianic glint with which economic agency theory and positive accounting theory are proselytized is seriously reminiscent of the Inquisition. We much prefer our position as heretics. Despite our attachment elsewhere to accountability theory (see, for example, Gray et al., 1987, 1988, 1991), it is essentially a rights-driven conception of organizational reporting with a high normative (or moral) dimension. While it is helpful in assessing the extent to which empirical and moral accountability differ from each other (and, thus, providing some guidance on some of the current failures of liberal democracy), it is not an especially helpful perspective for the interpretation of CSR practice. Indeed, organizations may approach a stakeholder analysis in a benign frame of mind. Current work in the UK on the development of the (so-called) social audit by value-based organizations such as Traidcraft plc is an apparently genuine and honest attempt to understand the organization in its social context (see, for example, Zadek, 1993; Zadek and Evans, 1992). There is no necessity that stakeholder analysis should be exclusively bourgeois. It is possible to imagine an analysis of the interplay of the various elements of capitalism within a classical political economy perspective. It is not usual, though, to call this stakeholder theory. Recent work from Lehman (1992) and Neimark (1992) might be illustrations of this point. In this context, country-specific reporting and industry-specific reporting look more interesting for some sources of influence because influences and pressures may catch an industry with a worldwide image (as with oil and chemicals) or a set of influences may only lead to reaction in a specific setting. Certainly, one might reasonably expect the legislative environment in the USA to produce different responses from that in the UK, for example (see Arnold, 1990 and Guthrie and Parker, 1990 in this regard) and one may reasonably expect first nation issues to be of greater moment in, for example, Australia and New Zealand than in, for example, France or Germany. (By first nations we refer to the aboriginal peoples for example, Australian Aborigines, North American Indians, the Sami or, at least, the pre-European peoples for example, the New Zealand Maori whose claims to recognition and self-realization have been heard more widely in recent years.) Similarly, one might be able to speculate about the inconsistent size effects. Size is probably not a continuous function with respect to CSR in that: first, small, localized organizations may experience other channels of communications and transparency (see, for example, Gray, 1992); and, second, financial size is likely to be less important than political presence and public visibility. Certainly, as an illustration, size and industry factors would not be enough to distinguish those organizations producing high-profile environmental reports in the UK in the early 1990s from those which did not. Whereas other factors, such as public profile and commitment of CEOs, would provide a crude basis

16.

17.

18.

19.

for differentiation (see, for example, Bebbington et al., 1994; Gray et al., 1993; Gray and Owen, 1993). There is just one caveat we would make at this stage. The data are drawn from two samples. The first sample (relating to 1979-1987) is a haphazard sample and includes a wide range of companies by size. The second sample (1988-1991) concentrates exclusively on the UKs largest 100 companies. This matter is examined in some detail in Gray et al. (forthcoming) and it is apparent that there will be a notable size effect in the data between 1987 and 1988. This will be recognized in the interpretation and each of the graphs shows a line at the intersection of the two samples. Detailed environmental disclosure was only collected from 1988 onwards. Over the 19881991 period environmental disclosure was dominated by disclosure on products and processes, environmental other and, to a lesser extent, environmental policy. The really significant issues of environmental audit and the financial effects of the environment were reported by very few companies. Sustainability was mentioned by no companies in 1988 and by only five in 1991. This attitude is closely in line with the UK governments consistent and adamant refusal to embrace the EU proposals for either worker representation on the company board of directors or the Social Chapter. This is one of the issues on which much discussion took place as to whether this should be considered CSR. See Gray et al. (forthcoming).

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References and further reading Abbott W.F. and Monsen, R.J. (1979), On the measurement of corporate social responsibility: selfreported disclosures as a method of measuring corporate social involvement, Academy of Management Journal, Vol. 22 No. 3, pp. 501-15. Abercrombie N., Hill, S. and Turner, B.S. (1984), Dictionary of Sociology, Penguin, Harmondsworth, Middlesex. Andrews, B.H., Gul, F.A., Guthrie, J.E. and Teoh, H.Y. (1989), A note on corporate social disclosure practices in developing countries: the case of Malaysia and Singapore, British Accounting Review, Vol. 21 No. 4, December, pp. 371-6. Arnold, P.J. (1990), The state and political theory in corporate social disclosure research: a response to Guthrie and Parker, Advances in Public Interest Accounting, Vol. 3, pp. 177-81. Arrington, E. (1990), Intellectual tyranny and the public interest: the quest for the holy grail and the quality of life, Advances in Public Interest Accounting, Vol. 3, p. 16. Arrington, E. and Francis, J. (1989), Letting the chat out of the bag: deconstruction, privilege and accounting research, Accounting, Organizations and Society, Vol. 14 No. 1/2, pp. 1-28. Aupperle, K.E. (1984), An empirical measure of corporate social orientation, Research in Corporate Social Performance and Policy, Vol. 6, pp. 27-54. Bebbington, K.J., Gray, R.H., Thomson, I. and Walters, D. (1994), Accountants attitudes and environmentally sensitive accounting, Accounting and Business Research, No. 94, Spring, pp. 51-75. Belkaoui, A. (1980), The impact of socio-economic accounting statements on the investment decision: an empirical study, Accounting Organizations and Society, Vol. 5 No. 3, pp. 263-83. Belkaoui, A. (1984), Socio-economic Accounting, Quorum Books, Connecticut. Belkaoui, A. and Karpik, P.G. (1989), Determinants of the corporate decision to disclose social information, Accounting, Auditing & Accountability Journal, Vol. 2 No. 1, pp. 36-51. Benjamin, J.J. and Stanga, K.G. (1977), Difference in disclosure needs of major users of financial statements, Accounting and Business Research, Summer, pp. 187-92. Benston, G.J. (1982a), Accounting and corporate accountability, Accounting, Organizations and Society, Vol. 7 No. 2, pp. 87-105. Benston, G.J. (1982b), An analysis of the role of accounting standards for enhancing corporate governance and social responsibility, Journal of Accounting and Public Policy, Vol. 1 No. 1, pp. 5-18.

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