The Quality of Sustainability Reporting within a Global Listings Context: A Legitimacy Theory Evaluation of Relevant Empirical Evidence
Document Type
Conference Proceeding
Publication Date
7-7-2022
Abstract
Initially, the paper determines using globally accepted standards/metrics, the Quality of Sustainability Reports over a recent five-year time-frame, of the Global Fortune 100 Companies. Then, it relates the determined QSRs with the absence/presence of computed intensities of particular empirical corporate features suggested by Legitimacy Theory. Thus, it statistically evaluates/associates the determined qualities with Legitimacy Theory implications. The research adopts a positivist philosophy and, using hypothetical deductions, is deductive in approach. It uses secondary public data within a near-archival strategy. The data is longitudinal from the same G100 Companies over the time-frame. The dataelements are grounded in Legitimacy Theory implications, identifying/capturing appropriate empirical corporate features. Recognizing these may be intrinsic or extrinsic to the Sustainability Report, the paper examines/analyses only three extrinsic features: 1.External assurance of Sustainability Report 2.Independence of Chair 3.Independence of Board Analytically, the paper employs hypothetical deductions drawn from Legitimacy Theory and statistically evaluates them. It uses Ordinal Logistic Regression with QSR as the Dependent Variable and the three computed features (above) as Independent Variables. Doing so, the paper reveals the linkage and/or association of the three features, with the relevant QSRs of the 500 SRs observations evaluated. The paper conveys Descriptive and Inferential Statistics from the analyzed data. With one exception, the inferential regression statistics reveal a significantly positive association with QSRs and the identified corporate features. To that extent, the results accord with expectations spawned by Legitimacy Theory. However, contrary to Legitimacy Theory expectations, they suggest that the percentage of Independent Directors on the Board does not appear to be positively associated with the firms’ QSR. The global setting of the research weakens generalized application of results to individual countries. Nevertheless, the results do provide both theoretical and practical insights. They suggest that firms wishing to continue to maintain/extend their societal legitimacy should (noting the identified exception) ensure good expression of the three research corporate features - most importantly the assurance of the Sustainability Reports. Practical benefits for legislators, governance regulators/practitioners and other stakeholders are also enabled. The paper provides insights into some corporate features of import to the domain of sustainability accounting/reporting and healthy SR practices that positively influence and maintain/extend the perceived societal legitimacy of the reporting company. The paper makes a signal and partly-seminal contribution to the limited literature on the quality of Sustainability Reporting across a global domain. It employs internationally recognized metrics embodied within the Global Reporting Initiative.
Recommended Citation
Rashwan, Mohamed; Abdelrahman, Noha; and D'silivia, Kenneth, "The Quality of Sustainability Reporting within a Global Listings Context: A Legitimacy Theory Evaluation of Relevant Empirical Evidence" (2022). Business Administration. 281.
https://buescholar.bue.edu.eg/bus_admin/281