Gaining legitimacy in large Australian listed companies: exploring the role of corporate reporting regarding employees

Abstract

Corporate reporting is a key tool in managing stakeholder relationships. It is useful for developing corporate legitimacy especially as large listed companies are increasingly asked to report on different dimensions of their performance (economic, social and environmental). Our paper thus investigates corporate reporting regarding employees in large listed Australian companies by questioning how they take into account their national and industrial contexts to develop legitimacy. We analyse corporate reporting of employees in 60 Australian companies listed on the Australian Stock Exchange top 100 companies in 2009. First we found that companies report to develop their pragmatic legitimacy by providing information on the benefits valued by employees such as health and safety or career development. They also attempt to improve their moral legitimacy by communicating on anti-discrimination policies or business ethics. Lastly they try to enhance their cognitive legitimacy by reporting against areas such as health and safety and business ethics whilst they do not report against industrial relations and responsible management of employees. We also underline the influence of industry risk characteristics in shaping corporate reporting practices.

Keywords:

• legitimacy theory
• employees
• reporting
• Australia
• listed companies

Acknowledgements

They would like to thank the previous editor Peter Gahan and the anonymous reviewers for comments on earlier versions of this paper.

Notes

1. Results obtained from this statistical procedure are available on request to the authors.