THE RELEVANCE OF SOCIAL PERFORMANCE DISCLOSURE FOR FINANCIAL PERFORMANCE OF COMPANIES INCLUDED IN BELEXline INDEX

Abstract

In the contemporary conditions of intense dynamics of competition, clearly articulated demands of the community and booming environmental requests, corporate social responsibility (CSR) becomes an imperative strategy for responsible and ethical company management. The primary goal of the research is to identify the relevance of social performance for financial success of the most liquid Serbian companies included in the BELEXline index in the period from 2014 to 2018. The level of social performance disclosure is determined using content analysis and the formulation of the social performance disclosure index. In order to confirm the initial hypotheses, cluster analysis and the non-parametric Mann-Whitney U test are used. The empirical findings of this research indicate that the disclosure of social performance is relevant only at the level of certain financial indicators, given that the non-financial reporting of the companies from the sample is at a low level. With changing business conditions, higher requirements for CSR, and increasingly demanding regulations on non-financial reporting, this study provides information on the relationship between the social indicators and the financial performance that are important both in terms of defining sustainability strategies at the company level and from the point of view of the capital market, regulatory bodies and the academia.