Anti-Corruption Disclosures as part of CSR reporting in Europe: Initial Insights

This study investigates the change in the corporate practice of disclosing information on anti-corruption in CSR reports consequent to the EU Directive on non-financial reporting. In order to improve corporate reporting and, particularly, the disclosures on anti-corruption, the EU issued in 2014 a directive requiring member states to mandate disclosure on anti-corruption as part of non financial reporting. Against this development, this study empirically examines, for a sample of 55 European listed companies, whether there is a change in such voluntary disclosures from period previous to the directive (2012) in comparison to period after the issuing of the directive and before its transposition in national legislation (2015). Following a legitimacy theory perspective, we expected companies to improve the amount and quality of disclosures. Further, we expected disclosures to be associated with legitimacy variables i.e.: negative disclosures, exposure to corruption and firm size. We assessed and compared the quantity, breadth and informational quality of the disclosures and conducted the analysis on the whole sample and on two sub-samples including respectively firms exposed and not exposed to corruption. Results show a growth of the quantity, scope and informational quality of the disclosures on anti-corruption and a positive association of quantity, scope and informational quality of anti-corruption disclosure with time effect, propensity of a firm towards voluntary negative disclosure on corruption information, corruption-risk exposure and firm size.