Environmental reporting: transparency to stakeholders or stakeholders’ manipulation? An analysis of disclosure tone and the role of board of directors
Corporate Social Responsibility and Environmental Management
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We study whether environmental reporting serves as a transparency tool to communicate sound environmental policies to stakeholders or rather as a manipulation tool of stakeholders' perceptions. In particular, we focus on the relationship between environmental disclosure tone and future environmental performance and we furthermore explore the role of the board of directors' monitoring and stakeholder orientation in shaping this relationship. Using a sample of 288 US oil and gas firms, we find that the bias towards positive language does not reflect purely opportunistic managerial reasons, but rather is a transparency tool to signal future environmental performance. In addition, we document that the stakeholder orientation of the board plays a transparency role in communicating the firm's superior performance. Our findings contribute to the debate on whether discretionary strategies in environmental reporting are more about increased transparency or about stakeholder manipulation. Moreover, they help investors and policymakers to interpret managers' language choices.
This is the accepted version of the following article: Environmental reporting: transparency to stakeholders or stakeholders’ manipulation? An analysis of disclosure tone and the role of board of directors. Corporate Social Responsibility and Environmental Management 2014, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1002/csr.1350/abstract
Vol. 22, No. 6, pp. 346-361;