Contrasting Two Models for Reporting Corporate Social Activities: Encouraging the Responsible and Discouraging the Irresponsible

Jean E. Harris, Gary M. Cunningham

Resumo


This paper reviews the traditional incentive model of reporting corporate social responsibility (CSR),a complementary disincentive model is introduced, and the two are compared. Both models are groundedin the assumption that reporting increases the supply of information to inform providers of capital and,being informed, providers respond. The traditional model assumes an incentive response, i.e. the capital isprovided and the cost of capital is beneficial to the company. By contrast, and the emerging model assumesa disincentive response, information motivates potential debt or equity investors to withhold capital.The emerging disincentive model is seen in the coal mining industry of the U.S. through (a) derivative lawsuitsby shareholders to obtain safety and environmental information about corporate actions, (b) banking policiesthat restrict credit for mountaintop removal coal mining (MTRM), and (c) regulatory provisions e.g. Dodd-FrankAct requiring financial statement disclosure of health and safety mining health and safety standards. Also, thedisincentive model is advanced through technology (a) in collection, aggregation, and disclosure of informationand (b) investment funds that exclude socially irresponsible companies. The emerging CSR disincentive reportingmodel (a) addresses core accountability aspects reporting compliance failures with laws and regulations and(b) incorporates beneficial accounting and auditing attributes. Implications for further research are presented.

Palavras-chave


Accounting; Corporate Social Responsibility; Corporate Social Responsibility Reporting

Texto completo:

PDF


DOI: https://doi.org/10.7177/sg.2011.V6.N2.A1

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

 

ISSN: 1980-5160

Rua Passo da Pátria 156, bloco E, sala Sistemas & Gestão, Escola de Engenharia, São Domingos, Niterói, RJ, CEP: 24210-240

Tel.: (21) 2629-5616

Correspondência: Caixa Postal LATEC: 100175, CEP 24.020-971, Niterói, RJ