Social Norms and Disclosure Policy: Implications from a Comparison of Financial and Corporate Social Responsibility Reporting

Recently, pressure from multiple stakeholders regarding corporate social responsibility (CSR) policies and activities has resulted in firms' increased effort to measure and report information on numerous environmental and social issues. Disclosure of CSR information has generally been voluntary, and guidelines regarding the measurement and reporting of such information have been developed by stakeholder groups, evolving as a function of social norms. In spite of the apparent plurality of viewpoints contributing to the process, research results indicate that the outcomes seldom reflect the full range of stakeholder concerns, and often reflect only the preferences of dominant corporate interests (see, for example, Archel et al., 2011). Shortcomings in existing reporting and the perceived importance of this information for stakeholder decision making are factors in the call for greater regulation of CSR reporting to facilitate both the existence and comparability of CSR disclosure. While accountability to society requires input by a broad range of stakeholder groups, regulation has traditionally been implemented by a hierarchical governance structure. We examine the historical development of financial and CSR reporting for insight into how the process can include relevant stakeholders while still ensuring adequate disclosure. Based on our analysis, we believe that CSR reporting should be mandatory, but that the specific information content of CSR to be required in CSR reports should be developed by a dialogical process that includes a wide range of stakeholder groups.