Determinants of the Compliance with CSR guidelines
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2019-04-10
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en
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Abstract
In response to stakeholders and society’s pressure for a reliable Corporate Sustainability Report (CSR), companies increasingly have voluntarily complied with the most acceptable sustainability guidelines. However, the level of compliance with sustainability guidelines may vary amongst companies. Therefore, this study investigates company-specific characteristics that may impact the level of compliance with sustainability guidelines. Based on signaling theory, this paper argues that companies with superior CSP tend to comply to a high extent with sustainability guidelines. This compliance is used as a tool to signal the reliability of the reported information. Therefore, companies with superior CSP can differentiate themselves from inferior CSP as their good performance cannot be easily reproduced. Conversely, the complying with sustainability guidelines may also be beneficial to companies with inferior CSP. To protect the company’s reputation from legitimacy threats, managers may use their control and discretion to strategically decide to which extent to comply with sustainability guidelines. Therefore, companies with inferior CSP are also expected to comply to a high degree with sustainability guidelines. To test the hypotheses, this study uses a sample of 1,025 company-observations during the period 2015 till 2017, from 39 countries worldwide. The findings of this study provide support for signaling theory, indicating that companies with superior CSP tend to comply to a high extent with sustainability guidelines to signal the reliability of their superior sustainability performance to external agents.
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Faculteit der Managementwetenschappen