Corporate social reporting (CSR) and stakeholder accountability in Bangladesh. Perceptions of less economically powerful stakeholders

• Published date: 03 October 2016
• Pages: 415-442
• DOI: https://doi.org/10.1108/IJAIM-05-2016-0064
• Date: 03 October 2016
• Author: Md Moazzem Hossain,Manzurul Alam
• Subject Matter: Accounting & Finance,Accounting/accountancy,Accounting methods/systems

Corporate social reporting (CSR)

and stakeholder accountability

in Bangladesh

Perceptions of less economically

powerful stakeholders

Md Moazzem Hossain and Manzurul Alam

School of Business and Governance, Murdoch University,

Murdoch, Australia

Abstract

Purpose – The purpose of this paper is to investigate organisational accountability to less

economically powerful stakeholders in the absence of formal corporate social reporting (CSR)

guidelines. In addition, this study emphasises the role of administrative and institutional reforms in

empowering stakeholders in a developing country context, namely, Bangladesh.

Design/methodology/approach – Consistent with prior literature, this qualitative study collected

data through semi-structured interviews with 23 representatives from NGOs, media, civil society,

customers, regulators, trade union leaders and employees who are considered as less economically

powerful stakeholders. This paper draws on the demand for administrative reforms along with an

institutional support structure (Owen et al., 1997) to enhance CSR and corporate accountability.

Findings – The empirical evidence shows that there is a need for a stand-alone mandatory CSR to

achieve stakeholder accountability. It also shows that there are demands from “stakeholders to right to

know” about the company’s social and environmental performance along with stakeholder

engagements. There is a perceived demand for administrative reform along with institutional supports

that can contribute to the CSR development in Bangladesh. These administrative reforms would

encourage transparent corporate social and environmental practices. Given the socio-economic and

vulnerable environmental conditions of Bangladesh, stakeholders in this study suggested contextually

relevant CSR guidelines towards greater accountability.

Research limitations/implications – This paper is one of the few engagement-based studies which

explore the perceptions of less economically powerful stakeholders towards CSR developments in an

emerging economy – Bangladesh. The ndings of this study using the theoretical lens of accountability

with administrative and institutional reforms lead us to conclude that companies in Bangladesh have

low level of CSR towards stakeholder accountability and stakeholder engagements.

Originality/value – The paper contributes to the CSR literature by highlighting the needs of CSR

from the stakeholder’s accountability perspective.

Keywords Bangladesh, Developing countries, Corporate social reporting, Administrative reform,

Stakeholders accountability

Paper type Research paper

1. Introduction

Stakeholder accountability in corporate social reporting (CSR) research has gained

academic attention in recent times (Tilt, 2007;Unerman and Bebbington, 2007)by

recognising the voice of less economically powerful stakeholders towards corporate

The current issue and full text archive of this journal is available on Emerald Insight at:

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Corporate

social

reporting

415

Received 31 May 2016

Revised 12 August 2016

Accepted 14 August 2016

InternationalJournal of

Accounting& Information

Management

Vol.24 No. 4, 2016

pp.415-442

©Emerald Group Publishing Limited

1834-7649

DOI 10.1108/IJAIM-05-2016-0064

accountability. Despite nancial meltdowns in recent years, society at large is

becoming more concerned and critical of the corporate social and environmental

performance (Kolk and Pinkse, 2006;KPMG, 2008). This is evidenced by a recent

survey report of KPMG (2013) in which it is revealed that more than 93 per cent of

the world’s top 250 companies produce separate CSR/sustainability reports to

ensure accountability and transparency to the stakeholders. Several authors

identied the inuence of both internal and external factors, such as reputation,

desire from management, external pressure, etc., (Adams, 2002) on CSR practices.

Recent literature argues how the voluntary nature of CSR seeks to manage public

impression by providing social and environmental information (O’Dwyer, 2003;

Galbreath and Shum, 2012;Deegan, 2002). But there is a criticism that companies

only highlight selected events and in most cases omit information which is

demanded by the stakeholders (Larrinaga-Gonzalez et al., 2002). It is also argued

that as due to the voluntary nature of CSR, there is no formal requirement for

producing veried social and environmental information and thus motivates

companies to render social accounting to a range of stakeholders. A number of

studies have suggested mandatory regulations for standalone CSR/sustainability

reports through administrative reforms (Owen et al., 1997,2001;O’Dwyer et al.,

2005) with institutional support. Specically, Larrinaga-Gonzalez et al. (2002)

contend that an arrangement of administrative reform with institutional support is

likely to provide an effective means of empowering stakeholders.

While there have been a growing number of studies examining stakeholders’

views and perceptions on CSR mostly from developed countries’ context, few

academic studies have focused on the perceptions on less economically powerful

“marginalised” stakeholders (with the exception of O’Dwyer et al., 2005). In addition,

there remains a complete absence of studies in developing countries by giving a

voice to less economically powerful stakeholders. The socio-economic context of

most developing countries including Bangladesh exhibits a number of social and

environmental challenges such as poverty, child labour, environmental pollutions

which is caused by the corporate organisations. The voices of the stakeholders are

considered to be narrow which reinforce the need to investigate how these groups of

stakeholders perceive CSR to meet their information needs towards corporate

accountability (Brunk, 2010). We respond to the recent call by O’Dwyer et al. (2005)

and Cooper and Owen (2007) who argue that views of a wider group of stakeholders

in CSR research are important to discharge of accountability.

This study takes up this call within a developing country context, namely,

Bangladesh. The purpose of this study is to investigate organisational

accountabilities to less economically powerful stakeholders in the absence of formal

CSR guidelines. In addition, this study highlights on the administrative and

institutional reforms to empowering stakeholders in Bangladesh. To achieve this

purpose, the paper analyses views of a wider groups of less economically powerful

non-managerial stakeholders, such as NGOs, media, civil society, customers, trade

unions and regulatory authorities. A series of in-depth, semi-structured interviews

were conducted with the above-mentioned stakeholders who hav0e been identied

as less economically powerful non-managerial stakeholders. The earlier studies

consider these groups of stakeholders are less economically powerful

non-managerial stakeholders because they often play an important role in changing

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