Can social disclosure induce a better corporate social performance?

Abstract

Against the background of the debate on the social reporting-social performance link, this article aims to analyse the influence of social disclosures on social performance. Specifically, we analyse the effect of the voluntary disclosure of standardised indicators regarding labour practices and human rights on corporate social performance. A Tobit regression was used on data obtained through content analysis for a sample of 1,243 multinational enterprises for the period 2013–2017. The results show that both total and partial disclosure of the performance indicators are positively associated with higher social performance, confirming that the disclosure of such indicators is oriented towards the improvement of corporate sustainability as opposed to impression management strategies. We demonstrate that, even though companies may aim to satisfy stakeholder demands through the voluntary disclosure of labour practices, decent work and human rights indicators, these indicators can also act as catalysts for strengthening corporate social policies and practices. The findings provide a further motive to promote social reporting: its positive impact on corporate social performance favouring responsive labour management and greater social cohesion.

Keywords:

• Social reporting
• social performance
• labour practices and decent work
• human rights
• corporate social responsibility

JEL CODES:

• M14; M12; M49

Disclosure statement

No conflict of interest has been reported by the authors.

Additional information

Funding

Ministerio de Ciencia, Innovación y Universidades [Grant/Award Number: RTI2018- 093423- B- I00]; Consejería de Educación, Junta de Castilla y León [Grant/Award Number: SA069G18]; Universidad de Salamanca [Grant/Award Number: USAL2017- DISAQ]; Junta de Castilla y León y Fondo Europeo de Desarrollo Regional [Grant/Award No. CLU-2019-03 Unidad de Excelencia “Gestión Económica para la Sostenibilidad” (GECOS)]; and Xunta de Galicia [Grant/Award Number: 2020 GPC GI2016].