گزارش دهی اجتماعی شرکت و حسابدهی ذینفعان : حلقه گم شده

Recent years have witnessed a significant degree of administrative reform, in terms of the increasing number of major companies proclaiming their social responsibility credentials, and backing up their claims by producing substantial environmental, social and sustainability reports. The paper critically evaluates the degree of institutional reform, designed to empower stakeholders, and thereby enhance corporate accountability, accompanying these voluntary initiatives, together with that potentially ensuing from proposed regulations, later rescinded, for mandatory publication of an Operating and Financial Review by UK quoted companies. It is concluded that both forms of disclosure offer little in the way of opportunity for facilitating action on the part of organizational stakeholders, and cannot therefore be viewed as exercises in accountability.

Recent years have witnessed a significant increase in the number of major companies in Europe, the USA and Australia proclaiming their social responsibility credentials, and backing up their claims by producing substantial paper, or web based, environmental, and more recently, social and sustainability reports (see, for example, KPMG, 2005). Perhaps not surprisingly in view of the fall-out from Enron and similar affairs, reputation building appears to provide a primary motivating factor for companies going down the Corporate Social Responsibility (CSR) path. Thus, for example, Business in the Community’s (2003) ‘business case’ for CSR notes that it offers: “… a means by which companies can manage and influence the attitudes and perceptions of their stakeholders, building their trust and enabling the benefits of positive relationships to deliver business advantage.” (p. 3) The degree of administrative reform has certainly been substantial in terms of the production of new accountings which heighten levels of organisational transparency, potentially in the interests of improved accountability (Power, 1994).1 However, questions arise as to whether exclusive reliance on the ‘business case’ to encourage such initiatives is capable of promoting institutional reform sufficient to empower organisational stakeholders, so that this potential heightened accountability may be realised (Owen, Gray, & Bebbington, 1997). Influential standards and guidelines which increasingly inform leading edge reporting practice, notably the Global Reporting Initiative (GRI) and AccountAbility’s AA1000, unequivocally suggest that it can. The former, for example, notes that: “A primary goal of reporting is to contribute to an ongoing stakeholder dialogue. Reports alone provide little value if they fail to inform stakeholders or support a dialogue that influences the decisions and behaviour of both the reporting organisation and its stakeholders.” (GRI, 2002, p. 9) For AA1000, a quality reporting process is quite simply governed by the principle of accountability, which is itself underpinned by the principle of inclusivity, i.e. accountability to all stakeholder groups. “Inclusivity concerns the reflection at all stages of the … reporting process over time of the aspirations and needs of all stakeholder groups – those groups who affect and/or are affected by the organisation and its activities. Stakeholder views are obtained through an engagement process that allows them to be expressed without fear or restriction.” (AccountAbility, 1999, p. 7) AccountAbility’s subsequently issued Assurance Standard further underlines the stakeholder accountability credentials of the reporting process in promulgating the principles of materiality, completeness and responsiveness. The materiality principle requires the assurance provider to state whether the reporting organisation has included in its report information required by stakeholders to enable them to make informed judgements, decisions and actions, whilst the completeness principle calls for an evaluation of the extent to which the organisation can identify and understand material aspects of performance. Finally, and most fundamentally, the responsiveness principle requires that, “… the Assurance provider evaluate whether the reporting organisation has responded to stakeholder concerns, policies and relevant standards and adequately communicated these responses in its report.” (AccountAbility, 2003, p. 18) Notwithstanding the democratising potential of corporate social reporting claimed by the GRI and AccountAbility, severe reservations have been expressed in the academic accounting literature as to the degree of participatory role played by stakeholders in the process. In particular, it has been suggested that prevailing stakeholder engagement practices have little to do with extending accountability and amount to nothing more than exercises in stakeholder management and corporate spin (see, for example, Gray, 2000, O’Dwyer, 2003, O’Dwyer, 2005, Owen et al., 2000 and Owen et al., 2001). Recent developments in the United Kingdom suggest that the time is now opportune to re-visit these claims and counter claims. Firstly, there has been a dramatic quickening of pace of administrative reform in terms of companies producing stand alone social and environmental reports, with KPMG’s latest (2005) triennial survey of reporting practice indicating that 71% of the FTSE 100 produced such reports, whilst slightly later (2005) figures from the consultancy organization Salterbaxter suggest that the number now exceeds 80%. Secondly, the prospect of mandatory reporting was raised by the Department of Trade and Industry’s (DTI, May 2004) publication of draft regulations on the Operating and Financial Review (OFR), which it was envisaged would become a statutory requirement for all quoted companies.2 Under the provisions of these regulations a company would have been required to provide information on policies ‘towards its employees, customers and suppliers as well as its impact on the environment, social impacts and impacts on the wider community where that information is necessary for an assessment of the company’ (DTI News Release ref. P/2004/177, 5 May, 2004). Our aim in the present paper is to undertake a critical evaluation of the extent of institutional reform accompanying current ‘leading edge’ reporting initiatives, together with that potentially ensuing from the proposed OFR regulations. To this end, for illustrative purposes we draw upon a number of reports short-listed for the Social and Sustainability categories of the 2003 ACCA UK Sustainability Reporting Awards Scheme,3 together with an analysis of the somewhat long drawn out processes which led to the publication of the DTI’s OFR draft regulations. In particular, we are concerned with assessing their potential for enhancing stakeholder accountability. The remainder of the paper begins with a consideration of accountability and its theoretical underpinnings. This section identifies a number of competing conceptions of accountability, but contends that there are a number of relevant preconditions if accountability is to be advanced. These preconditions are then, within the following two sections, used as an analytical framework to consider whether accountability has, or has not, been extended by ‘leading edge’ reporters and by the development of the OFR within the UK. The paper’s final section provides some concluding comments with specific regard to the power relations within modern society and the implications this has for present and future accountability practice. A key objective of this paper is to offer some contribution to public policy debate.

The above analysis suggests that the proposed, but scrapped, mandatory reporting of social and environmental information via the OFR proposals was likely to be as ineffective as voluntary disclosure of such information in a special purpose report in terms of facilitating action on the part of organisational stakeholders. The common feature of both approaches lies in the fact that administrative (reporting) reform is viewed in isolation from any necessary institutional reform which may provide the means for stakeholders to hold company directors accountable for actions affecting their vital interests. As Williamson (1997) argues; “Disclosure of information can only have limited effect … because the likelihood of it leading to action depends on the ability of others to use information in forums in which they have a legitimate voice.” (p. 160) It is quite impossible to envisage stakeholder accountability being established in a situation where company directors acknowledge enforceable duties only to shareholders and, at least in Anglo- Saxon capitalism, pursue a pre-occupation with maximising shareholder value (see Collison, 2003 and Bakan, 2004). For stakeholder accountability to be established, a far more pluralistic form of corporate governance would be required. There would need to be a clear recognition that there are other normatively legitimate stakeholders than simply equity shareholders alone (Phillips, Freeman, & Wicks, 2003). Other groups after all, particularly employees, make firm specific investments and incur risks in the same way in which shareholders do. To deny them representation in the governance of the company therefore appears somewhat difficult to justify on moral grounds (see, for example, Gamble & Kelly, 2001). What has to be recognised is that despite the claims of writers such as Sternberg (2004), for whom stakeholder theory is ‘a deeply dangerous doctrine’, the corporation is not coextensive with the shareholders. As Phillips et al. (2003) note; “It is an entity unto itself. It may enter into contracts and own property … It has standing in a court of law. Limited liability assures that shareowners are not, in general, personally liable for the debts of the organisation … Top managers are agents for the corporation and this is not merely a shorthand way of saying that they are agents for the shareholders. The corporation is meaningfully distinct.” (p. 483) Kay (1997) similarly rebuts the notion that shareholders in any real sense ‘own’ the company, as opposed to having particular and specific claims upon it, and points out that the ‘organic’ model of corporate behaviour (whereby the corporation has a life independent from its shareholders) describes the behaviour of large companies and their managers somewhat better than does the prevalent principal-agent perspective. Criticisms of the organic, stakeholder, model of the organisation traditionally focus upon problems in pursuing multiple objectives and balancing benefits for all stakeholders thereby establishing an accountability that is so diffuse as to be ineffective (see, in particular, Sternberg, 2004). However, as Phillips et al. (2003) argue, the stakeholder model does not advocate that managers serve the interests of multiple masters, but rather the interests of one – the organisation. They go on to point out that maximisation of shareholder wealth in itself is an indeterminate objective, given the innumerable ways in which it may be pursued. Furthermore, the diffuse accountability argument can readily be countered by establishing a stakeholder statute prescribing corporate objectives and responsibilities towards specified stakeholder groups (see Kay, 1997). Whilst the corporate lobby apparently espouses a commitment to stakeholder responsiveness, and even accountability, their claims are pitched at the level of mere rhetoric which ignores key issues such the establishment of rights and transfer of power to stakeholder groups. Hierarchical (Roberts, 1996) and coercive (Habermas, 1992) power prevent the form of accountability that can be achieved through “discussion” and “dialogue”. This paper provides evidence that the executive management of organizations and, perhaps even more worryingly, the government make use of “one-dimensional” power (Lukes, 2005) within the decision-making process to favour shareholders over all other interested groups. In the words of Lukes (2005, p. 19), one-dimensional power: “involves a focus on behaviour in the making of decisions on issues over which there is an observable conflict of (subjective) interests, seen as express policy preferences, revealed by political participation.” (emphasis in original) The use of one-dimensional power was apparent in how the prominence given to stakeholders was reduced subsequent to the vehement corporate responses to the OFR Materiality Working Group’s 2003 consultation document. We also saw that the proposed mandatory nature of the OFR itself, and particularly any potential social and environmental disclosures, was removed by Gordon Brown to ensure that not too great a burden was placed on business. Such government decisions observably favoured shareholder interests. It is much more difficult to comment upon whether organizations and the government also favour shareholders through the use of two-dimensional and three-dimensional power where “decisions are prevented from being taken on potential issues” (p. 25) and “the ways in which potential issues are kept out of politics” (p. 28) respectively. We could suggest that the failure of governments to even consider, or consult on, requiring significantly extended corporate social and environmental reporting is an example of three-dimensional power being used to protect corporations and their shareholders. Of course, as Lukes (2005) explained, it is very difficult to obtain evidence to support or refute such a suggestion. Stoney and Winstanley (2001) point out that it is quite fallacious to imagine that “… stakeholding can change the corporate balance of power without the support of wider societal reform” (p. 613). As we have argued in this paper, it is equally fallacious to imagine that accountability to stakeholders can be established by reporting reform alone. Significantly, the Company Law Review Steering Group, whose deliberations resulted in the 2002 White Paper, considered, and roundly rejected, the adoption of a pluralist approach towards defining directors’ duties (DTI, 2000). Under such an approach company directors would have owed an enforceable accountability to a wider range of stakeholders than merely capital providers. For one influential commentator (Cowe, 2000) its rejection simply ensured that stakeholder rights are no longer on the agenda, and Victorian age company law is set to stay. Certainly, the OFR proposals produced under the aegis of the preferred ‘enlightened shareholder’, or ‘inclusive’, model (DTI, 2000) did little to enhance corporate transparency and, even more fundamentally, it is quite impossible to envisage how stakeholders could have effectively utilised the information provided anyway. The latter point can equally be made about the, admittedly copious, information contained in stand alone social and environmental reports. Whilst sometimes not explicitly acknowledged, the same enlightened shareholder perspective underpins these latter initiatives, albeit going under the banner of ‘the business case’ in this instance. It is indeed salutary to recall that some thirty years ago reporting reform was advocated on the grounds of establishing ‘public accountability’ (Accounting Standards Steering Committee, 1975). Despite the level of administrative reform experienced since that time we have clearly gone backwards as far as moves to establish a wider corporate accountability is concerned. Such a situation cannot change unless the nettle of institutional reform is firmly grasped.