Corporate legitimacy and environmental reporting: identifying the audiences and choosing disclosure approaches (work in progress)
by Gary O'Donovan
Interdisciplinary Environmental Review (IER), Vol. 1, No. 2, 1999

Abstract: It is generally agreed that private corporations have duties and responsibilities greater then merely maximising profits for shareholders. These take the form of increased social responsibilities and this idea has its origins in the notion of a social contract between the corporation and society. Over the last two decades, the impacts that corporate activities have had on the natural environment has emerged as one of the most important social issues for corporations to manage. Legitimacy theory posits that the greater the likelihood of adverse shifts in the social perceptions of how a company is acting, the greater the desirability on the part of the company to attempt to manage these shifts in social perceptions: to remain legitimate. Managing legitimacy may take many forms, from the corporation changing its activities so that it is consistent with society's values, through to attempts to influence processes that may cause a change in social perceptions. Whatever form legitimacy management takes, to be successful the message must be communicated to society. Research suggests that the main way this communication takes place is through the disclosure of environmental information in the corporate annual report. What is not clear from the research to date, is whether corporations target these disclosures at specific audiences, those deemed more important to a corporation's continuing legitimacy, and if so, are there specific purposes for these disclosures. The purpose of this paper is to evaluate the current literature in order to explore the idea that corporations target legitimation tactics at specific stakeholder groups (referred to as conferring publics) and that corporations use environmental disclosures in the annual report to depict, or positively influence, a perception of congruence with the views of who it determines are its conferring publics.

Online publication date: Mon, 13-May-2013

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