Reporting Controversial Issues in Controversial Industries

Marshall, Donna; Jakob, Rehme; Aideen, O'Dochartaigh; Kelly, Stephen; Roshan, Boojihawon; Daniel, Chicksand

Abstract

Purpose: This article explores how companies in multiple controversial industries report their controversial issues. For the first time, we use a new conceptualization of controversial industries, focused on harm and solutions, to investigate the reports of 28 companies in seven controversial industries: Agricultural Chemicals, Alcohol, Armaments, Coal, Gambling, Oil and Tobacco.

Methodology: We thematically analyzed company reports to determine if companies in controversial industries discuss their controversial issues in their reporting, if and how they communicate the harm caused by their products or services, and what solutions they provide.

Findings: From our data we introduce a new legitimacy reporting method in the controversial industries literature: the solutions companies offer for the harm caused by their products and services. We find three solution reporting methods: no solution, misleading solution and less harmful solution. We also develop a new typology of reporting strategies used by companies in controversial industries based on how they report their key controversial issue and the harm caused by their products or services, and the solutions they offer. We identify seven reporting strategies:

Ignore, Deny, Decoy, Dazzle, Distort, Deflect and Adapt.

Originality: This paper develops a new typology of reporting strategies by companies in controversial industries and adds to the theory and discourse on social and environmental reporting (SER) as well as the literature on controversial industries.

Research implications: Further research can test the typology and identify strategies used by companies in different institutional or regulatory settings, across different controversial industries
or in larger populations.

Practical implications: Investors, consumers, managers, activists and other stakeholders of controversial companies can use this typology to identify the strategies that companies use to report controversial issues. They can assess if reports admit to the controversial issue and the harm caused by a company’s products and services and if they provide solutions to that harm.

Citation

Marshall, D., Jakob, R., Aideen, O., Kelly, S., Roshan, B., & Daniel, C. (2023). Reporting Controversial Issues in Controversial Industries. Accounting, auditing, & accountability, 36(9), https://doi.org/10.1108/AAAJ-07-2020-4684

• Journal Article Type: Article
• Acceptance Date: Sep 20, 2023
• Online Publication Date: Nov 3, 2023
• Publication Date: Nov 3, 2023
• Deposit Date: Oct 13, 2023
• Publicly Available Date: Oct 23, 2023
• Journal: Accounting, Auditing & Accountability Journal
• Print ISSN: 0951-3574
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 36
• Issue: 9
• DOI: https://doi.org/10.1108/AAAJ-07-2020-4684