Sustainability,accountability and corporate governance: exploring multinationals' reporting practices

Recent years have seen a rapid increase in accountability pressures on particularly large global companies. The increased call for transparency comes from two different angles, which show some (potential) convergence in terms of topics and audiences: accountability requirements in the context of corporate governance, which expand to staff‐related, ethical aspects; and sustainability reporting that has broadened from environment only to social and financial issues. This article examines to what extent and how current sustainability reporting of Fortune Global 250 companies incorporates corporate governance aspects. Many multinationals, particularly in Europe and Japan, have started to pay attention to board supervision and structuring of sustainability responsibilities, to compliance, ethics and external verification. While detailed disclosures are not yet common, some notable practices can be found. Underlying dilemmas and complexities for managers in dealing with accountability to shareholders and stakeholders, and the role of auditors, are indicated. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment     

Sustainable development disclosure: Environmental,social, and governance reporting and gender diversity in the audit committee

This paper analyzes the link between female representation on audit committees (ACs) and specific information attributes of environmental, social, and governance (ESG) disclosures. We also examine whether the role of women is moderated by the busyness and intensity of the committee. Our results reveal a positive association between gender diversity in the AC and the quality of voluntary ESG reporting, which results in greater comprehensiveness and relevance. These findings extend the academic debate concerning the role of female directors on sustainability policies. Moreover, given the importance of ESG information in capital markets and its potential benefits for firms, this evidence may help regulators and owners to implement adequate corporate governance mechanisms. In addition, the busyness of the AC negatively moderates the influence of female AC members. Therefore, we highlight the need to consider the context in which women work in order to understand their influence on sustainability reporting.     

Extended external reporting assurance: Current practices and challenges

This paper summarizes the UNCTAD ISAR WBCSD Webinar—Assurance on Sustainability Reports: Current Practices and Challenges, which explored views and practices on assurance of extended external reporting (EER) and identified challenges and potential ways forward. Stakeholders are demanding more accountability, as reflected in increased publication of EER and regulatory developments. EER can play an important role in rebuilding trust by catalyzing corporate focus and disclosure of business‐centric matters material to stakeholders including strategy, business model, governance, and greater transparency on other material non‐financial matters. Relatedly, EER cannot rebuild trust unless disclosures are credible and viewed as credible. Therefore, it is important that assurance, and other credibility enhancing techniques, is developed alongside EER frameworks and takes account of regulatory initiatives. We expand on lessons outlined during the Webinar by highlighting questions posed by participants, providing a historical overview of European regulatory developments (e.g., Directive 2014/95/EU and a forthcoming revision), providing a historical overview of the IAASB’s development of ISAE 3000 and forthcoming guidance on addressing major challenges aimed at supporting EER assurance, and providing an overview of practice‐focused publications addressing EER assurance. We conclude with an assessment of the way forward in regard to possible changes in the EER institutional setting, potential harmonization of EER standards, and the ability to provide reasonable versus limited assurance. Along with our companion paper (Venter and van Eck, 2021, 32), we contribute to the current discussion on EER assurance by providing a comprehensive assessment of the EER assurance landscape.     

Integrated thinking and sustainability reporting assurance: International evidence

Recently, there has been increasing demand by stakeholders for firms to demonstrate how they create value within the context of their operating environment. Consequently, a new reporting approach, integrated reporting (IR), was conceptualised with its development linked to the firm's integrated thinking (IT). Yet very little is known about the effects of IT on firms' reporting decisions. Hence, we investigate whether IT influences firms' decision to publish an assured sustainability report. Using an international dataset, we find that IT is positively associated with sustainability reporting assurance. We also find that this association is moderated by the type of legal system such that for firms in code law countries, the IT effects are reduced. Nevertheless, the effects of IT remain strong, indicating that IT is important for reporting decisions regardless of the firm's contextual setting. These findings have implications for policymakers and organisations interested in promoting high-quality sustainability reporting.     

Reporting on sustainability and HRM: a comparative study of sustainability reporting practices by the world's largest companies

As a response to the growing public awareness on the importance of organisational contributions to sustainable development, there is an increased incentive for corporations to report on their sustainability activities. In parallel with this has been the development of ‘Sustainable HRM’ which embraces a growing body of practitioner and academic literature connecting the notions of corporate sustainability to HRM. The aim of this article is to analyse corporate sustainability reporting amongst the world's largest companies and to assess the HRM aspects of sustainability within these reports in comparison to environmental aspects of sustainable management and whether organisational attributes – principally country-of-origin – influences the reporting of such practices. A focus in this article is the extent to which the reporting of various aspects of sustainability may reflect dominant models of corporate governance in the country in which a company is headquartered. The findings suggest, first and against expectations, that the overall disclosure on HRM-related performance is not lower than that on environmental performance. Second, companies report more on their internal workforce compared to their external workforce. Finally, international differences, in particular those between companies headquartered in liberal market economies and coordinated market economies, are not as apparent as expected.