Skip to main content
SpringerLink
Log in

Promoting business ethics through annual reports

  • Original Article
  • Published:
Journal of Financial Services Marketing Aims and scope Submit manuscript

Abstract

Growth in socially responsible investing among consumers should encourage them to seek information on business ethics activities during investment decisions. A content analysis of corporate annual reports shows differences in promotion of business ethics activities between 2010 and 2012, across products and on United States (US) Dow Jones Sustainability Index (DJSI) inclusion. Greater discussion in 2012 than 2010 was found for compliance in general and ethical treatment of employees and risk-reduction activities among DJSI-listed consumer goods providers, potentially reflecting increased interest in these activities. Results also showed that DJSI-listed companies are missing an opportunity to promote their ethical activities and the DJSI’s third-party verification of their ethical commitment to interested investors. Besides not optimizing their appeal to investors wishing to support ethical businesses, public companies inadequately use annual reports to demonstrate their commitment to ethics to other potential stakeholders such as activists, regulators, competitors, suppliers or the media.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2

Similar content being viewed by others

References

  • Abbott, W.F. and Monsen, R.J. (1979) On the measurement of corporate social responsibility: Self-reported disclosures as a method of measuring corporate social involvement. Academy of Management Journal 22 (3): 501–515.

    Article  Google Scholar 

  • Aupperle, K., Carroll, A. and Hatfield, J.D. (1985) An empirical examination of the relationship between corporate social responsibility and profitability. Academy of Management Journal 28 (2): 446–463.

    Article  Google Scholar 

  • Banerjee, S. (2008) Specific comments to responsibility: The good, the bad and the ugly. Critical Sociology 34 (1): 51–79.

    Article  Google Scholar 

  • Bowman, E.H. (1978) Strategy, annual reports, and alchemy. California Management Review 20 (3): 64–71.

    Article  Google Scholar 

  • Bowman, E.H. (1984) Content analysis of annual reports for corporate strategy and risk. Interfaces 14 (1): 61–71.

    Article  Google Scholar 

  • Breton, G. (2009) From folk-tales to shareholder-tales: Semiotics analysis of the annual report. Society and Business Review 4 (3): 187–201.

    Article  Google Scholar 

  • Dow Jones Sustainability Indexes (2009) Annual Review, http://www.sustainability-indices.com/images/review-presentation-2009_tcm1071-337421.pdf, accessed 23 January 2014.

  • Dow Jones Sustainability United States Index (2014) Fact Sheet, http://djindexes.com/mdsidx/downloads/fact_info/Dow_Jones_Sustainability_United_States_Index_Fact_Sheet.pdf, accessed 23 January 2014.

  • Duhé, S.C. (2009) Good management, sound finances, and social responsibility: Two decades of U.S. corporate insider perspectives on reputation and the bottom line. Public Relations Review 35 (1): 77–78.

    Article  Google Scholar 

  • Dutta, K. and Singh, S. (2013) Customer perception of CSR and its impact on retailer evaluation and purchase intention in India. Journal of Services Research 13 (1): 111–134.

    Google Scholar 

  • Finisterra do Paço, A.M., Raposo, M.L.B. and Filho, W.L. (2009) Identifying the green consumer: A segmentation study. Journal of Targeting, Measurement and Analysis for Marketing 17 (1): 17–25.

    Article  Google Scholar 

  • Frank, J.N. (2009) Sustainability marketing has legs. Marketing Management 18 (4): 4–5.

    Google Scholar 

  • Fulkerson, J. (1996) How investors use annual reports. American Demographics 18 (May): 16.

    Google Scholar 

  • Gray, R., Kouhy, R. and Lavers, S. (1995) Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal 8 (2): 47–77.

    Article  Google Scholar 

  • Hackston, D. and Milne, M. (1996) Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing & Accountability Journal 9 (1): 77–108.

    Article  Google Scholar 

  • Hammann, E.M., Habisch, A. and Pechalner, H. (2009) Values that create value: Socially responsible business practices in SMEs – Empirical evidence from German companies. Business Ethics: A European Review 18 (1): 37–51.

    Article  Google Scholar 

  • Johnson, H.H. (2003) Does it pay to be good? Social responsibility and financial performance. Business Horizons 6 (6): 34–40.

    Article  Google Scholar 

  • Joyner, B.E. and Payne, D. (2002) Evolution and implementation: A study of values, business ethics, and corporate social responsibility. Journal of Business Ethics 41 (4): 297–311.

    Article  Google Scholar 

  • Kassarjian, H.H. (1977) Content analysis in consumer research. Journal of Consumer Research 4 (1): 8–18.

    Article  Google Scholar 

  • Kolk, A., van Tulder, R. and Welters, C. (1999) International codes of conduct and corporate social responsibility: Can transnational corporations regulate themselves? Transnational Corporations 8 (1): 143–180.

    Google Scholar 

  • Lajili, K. and Zéghal, D. (2005) A content analysis of risk management disclosures in Canadian annual reports. Canadian Journal of Administrative Sciences 22 (2): 125–142.

    Article  Google Scholar 

  • Lentz, A. and Tschirgi, H. (1963) The ethical content of annual reports. Journal of Business 36 (October): 387–393.

    Article  Google Scholar 

  • Leonidou, L.C., Leonidou, C.N., Palihawadana, D. and Hultman, M. (2011) Evaluating the green advertising practices of international firms: A trend analysis. International Marketing Review 28 (1): 6–33.

    Article  Google Scholar 

  • Lichtenstein, D.R., Drumwright, M.E. and Braig, B.M. (2004) The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing 68 (3): 16–32.

    Article  Google Scholar 

  • Livesey, S.M., Hartman, C.L., Stafford, E.R. and Shearer, M. (2009) Performing sustainable development through eco-collaboration. Journal of Business Communication 46 (4): 423–454.

    Article  Google Scholar 

  • Macintosh, N.B. (1990) Annual reports in an ideological role: A critical theory analysis. In: N.B. Macintosh and T. Hopper (eds.) Accounting, the Social and the Political: Classics, Contemporary and Beyond. Boston, MA: Elsevier, pp. 163–171.

    Google Scholar 

  • McDonough, W. and Braungart, M. (2002) Cradle to Cradle: Remaking the Way we Make Things, 1st edn. New York: North Point Press.

    Google Scholar 

  • McWilliams, A. and Siegel, D. (2001) Corporate social responsibility: A theory of the firm perspective. Academy of Management Review 26 (1): 117–127.

    Google Scholar 

  • Miles, M.P. and Covin, J.G. (2000) Environmental marketing: A source of reputational competitive and financial advantage. Journal of Business Ethics 23 (3): 299–311.

    Article  Google Scholar 

  • Milne, M. and Adler, R. (1999) Exploring the reliability of social and environmental disclosures content analysis. Accounting, Auditing & Accountability Journal 12 (2): 237–256.

    Article  Google Scholar 

  • Moneva, J.M. and Llena, F. (2000) Environmental disclosures in the annual reports of large companies in Spain. European Accounting Review 9 (1): 7–29.

    Article  Google Scholar 

  • Nilsson, J. (2009) Segmenting socially responsible mutual fund investors. International Journal of Bank Marketing 27 (1): 5–31.

    Article  Google Scholar 

  • Nilsson, J., Nordvall, A.C. and Isberg, S. (2010) The information search process of socially responsible investors. Journal of Financial Services Marketing 15 (1): 5–18.

    Article  Google Scholar 

  • Obermiller, C., Spangenberg, E. and MacLachlan, D.L. (2005) Ad skepticism. Journal of Advertising 34 (Fall): 7–17.

    Article  Google Scholar 

  • Peterson, R.T. (1991) Physical environment television advertisement themes: 1979 and 1989. Journal of Business Ethics 10 (March): 221–228.

    Article  Google Scholar 

  • Porter, M.E. and Kramer, M.R. (2002) The competitive advantage of corporate philanthropy. Harvard Business Review 80 (12): 5–16.

    Google Scholar 

  • Preston, L.E. and O’Bannon, D.P. (1997) The corporate social-financial performance relationship. Business & Society 36 (December): 419–429.

    Article  Google Scholar 

  • Raiborn, C.A. and Payne, D. (1990) Corporate codes of conduct: A collective conscience and continuum. Journal of Business Ethics 9 (11): 879–889.

    Article  Google Scholar 

  • Sandford, N. and Epps, D. (2013) Compliance programs – On everyone’s agenda. Financial Executive 29 (6): 59–61.

    Google Scholar 

  • Sen, S. and Bhattacharya, C.B. (2001) Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research 38 (May): 225–243.

    Article  Google Scholar 

  • Shleifer, A. and Vishny, R.W. (1997) A survey of corporate governance. Journal of Finance 52 (June): 737–783.

    Article  Google Scholar 

  • Stittle, J. (2002) UK corporate ethical reporting – A failure to inform: Some evidence from company annual reports. Business and Society Review 107 (3): 349–370.

    Article  Google Scholar 

  • Sweeney, L. and Coughlan, J. (2008) Do different industries report corporate social responsibility differently? An investigation through the lens of stakeholder theory. Journal of Marketing Communications 14 (April): 113–124.

    Article  Google Scholar 

  • Torelli, C.J., Monga, A.B. and Kaikati, A.M. (2012) Doing poorly by doing good: Corporate social responsibility and brand concepts. Journal of Consumer Research 38 (February): 948–963.

    Article  Google Scholar 

  • Voorhes, M., Humphreys, J. and Solomon, A. (2012) Report on Sustainable and Responsible Investing Trends in the United States. Washington DC: US Social Investment Forum Foundation.

    Google Scholar 

  • Wagner, M. (2010) The role of corporate sustainability performance for economic performance: A firm-level analysis of moderation effects. Ecological Economics 69 (May): 1553–1560.

    Article  Google Scholar 

  • Waller, D.S. and Lanis, R. (2009) Corporate social responsibility (CSR) disclosure of advertising agencies: An exploratory analysis of six holding companies’ annual reports. Journal of Advertising 38 (Spring): 109–121.

    Article  Google Scholar 

  • Worcester, R. and Dawkins, J. (2005) Surveying ethical and environmental attitudes. In: R. Harrison, T. Newholm and D. Shaw (eds.) The Ethical Consumer. London: Sage, pp. 189–203.

    Chapter  Google Scholar 

  • Yoon, Y., Gürhan-Canli, Z. and Schwarz, N. (2006) The effect of corporate social responsibility (CSR) activities on companies with bad reputations. Journal of Consumer Psychology 16 (4): 377–390.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. College of Business, New Mexico State University, PO Box 30001, MSC 5280, Las Cruces, NM 88003-8001, USA

    Bruce A Huhmann & Suzanne L Conner

Authors
  1. Bruce A Huhmann
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Suzanne L Conner
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Huhmann, B., Conner, S. Promoting business ethics through annual reports. J Financ Serv Mark 19, 17–28 (2014). https://doi.org/10.1057/fsm.2014.2

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/fsm.2014.2

Keywords

Search

Navigation