Abstract
Previous literature in the field of corporate social responsibility investigates whether corporate social performance can be seen as a determinant of corporate social disclosure or, conversely, if corporate social disclosure is a determinant of corporate social performance. The aim of this paper is to join these two streams of research in a unique theoretical model, which can demonstrate that there is a mutual interaction between performance and disclosure. This can result, in the long run, in a virtuous circle where higher social performance generates future higher social disclosure and this determines higher future social performance and so on. An analytical model has been adopted to demonstrate the research hypothesis. Gathering data from the portfolios of the European Socially responsible funds (SRFs) listed on the Morningstar platform in 2010, the study analyzed 160 social reports published by 80 companies during 2008 and 2009. Findings, by demonstrating the non-one-way relationship between social performance and social disclosure, confirm the existence of a mutual influence between the results gained in different CSR areas and the capability to control and communicate such performance. In this way, the paper provides not only theoretical insights, but also practical implications for managers that are required to put in place responsive and effective initiatives towards the increasing pressure exerted by the internal and external environments in which they operate.
Highlights
In recent years, in highly developed economies, concerns about social issues have taken more and more momentum among stakeholders
Previous literature in the field of corporate social responsibility investigates whether corporate social performance can be seen as a determinant of corporate social disclosure or, if corporate social disclosure is a determinant of corporate social performance
Financial benefits of corporate social disclosure (CSD) gain a significant importance if we look at the institutional investors like the Socially Responsible Funds (SRFs) that have increased their weight on the financial markets
Summary
In highly developed economies, concerns about social issues have taken more and more momentum among stakeholders. This definition follows the one proposed by Davis [4] that identifies a social responsible company in the organization accomplishing social benefits, together with the profit seeking, in consideration and in response to issues which are beyond the narrow economic, technical and legal requirements of the firm Later on, another commonly used proposition refers to the European Community Commission [5] that considers the CSR as a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on voluntary basis. On the basis of previous considerations, it is arguable that the CSP and CSD are definitely two key issues in the field of corporate social responsibility When it comes to assess the relationship between social performance and social disclosure, scholars have not convergent positions, being apparently divided in two different perspectives. Research findings are presented and discussed in the fifth section
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