Social and Environmental Disclosure in Corporate Annual Reports: Evidence from Kuwait

Aly M Hewaidy

doi:10.3126/ijssm.v3i1.14219

Abstract

With the lack of empirical research in voluntary disclosure in the Middle East area, the present study aims at investigating and evaluating corporate social and environmental disclosure (CSED) practices in Kuwait. To achieve this objective, a checklist of 25 social and environmental disclosure items was developed. These items were then classified into four categories: human resources, environmental activities, community involvement and product/service related information. Using content analysis, the 25 disclosure items were applied to the annual reports of a sample of 43 companies listed in Kuwait Stock Exchange (KSE). It was found that the overall disclosure level for the sample companies is 21%. The disclosure level varies by disclosure category. Product/service related information achieved the highest disclosure level (43%), while human resources disclosure comes second (25%). Little attention was given to disclosing information related to community and environment, with a disclosure level of 16% and 8% respectively. These results suggested that there is a significant scope for additional social and environmental disclosure in the annual reports of Kuwaiti companies. Issuing regulations and guidelines on CSED is needed to motivate Kuwaiti companies to improve their social and environmental disclosures.Int. J. Soc. Sci. Manage. Vol-3, issue-1: 8-16

Highlights

Introduction and Research BackgroundInvestigation of the corporate social and environmental disclosure (CSED) has established a robust literature (e.g. Darrell and Schwartz, 1997; Walden and Stagliano, 2004; Kuasirikun and Sherer, 2004; Huafang and Jianguo, 2007; Chan, 2010)
Environmental information is primarily located in director report (92%), while human resources information is generally spread across director reports and notes to financial statements
Two main reasons were behind the conduct of this study; the increasing demand of society towards great social and environmental disclosure accompanied with the lack of research addressing this issue in developing countries, like Kuwait

Summary

Introduction

Introduction and Research BackgroundInvestigation of the CSED has established a robust literature (e.g. Darrell and Schwartz, 1997; Walden and Stagliano, 2004; Kuasirikun and Sherer, 2004; Huafang and Jianguo, 2007; Chan, 2010). Disclosure of social and environmental issues have been emerging as an important dimension of corporate disclosure practices (Ahmad and Mousa, 2010) Since 1990s, there has been a significant increase in CSED research. Some accounting journals have dedicated entire editions to social and environmental accounting issues. Among those journals are Accounting, Auditing and Accountability Journal (Vol., No.4, 1997 and Vol., No.3, 2002); European Accounting Review (Vol., No.1, 2000); Accounting Forum (Vol., No.2/3, 1995 and Vol., No.1, 2000) and Journal of Corporate Citizenship (Vol.13, 2004). There has been an increase in the number of studies dealing with CSED, corporate social and environmental issues in developing countries has lagged behind developed countries.

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