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CSR Assignment Main

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    Data were gathered from the annual reports of fifteen companies listed on the South Pacific Stock Exchange in Fiji. We find that the levels of voluntary disclosure in Fijian listed companies are low and do not support the assumptions of legitimacy theory. The outright adoption of International Accounting Standards by Fijian public limited companies does not engender in adequate disclosure of information on a voluntary basis. This paper extends the disclosure practice literature in developing countries by examining the voluntary practice by listed Fiji companies.

    It adds to our understanding of voluntary disclosure and therefore represents addition to, and extension of the international literature engaged in efforts to interpret the motives of such disclosure. A particular industry which this research particularly aims to study in depth is Avoidance Fiji Ltd and Avoidance TAT Foundation Fiji. This research would IM to study the Avoidance business, its effect on the community and the CARS policies in place effected through the Avoidance TAT Foundation Fiji. . 0 Introduction Corporate annual reports are the major medium through which a company delivers information including those of voluntary disclosure to the users (Designated al. , 2002). Corporate Social Responsibility is an absolute necessity that organizations define their roles in society and apply social, ethical, legal, and responsible standards to their businesses (Lingered&Swaen, 2004; Lou& Apothecary, 2006). Virtually everyone agrees that good corporate citizenship is essential.

    It is defined as ‘actual results (what corporations do) and the process through which they are achieved (how they do it)’ Nero and Norman (2008, p. 4). There has been an increasing pressure on companies to be responsible for their actions to the greater society in the recent years and also to show voluntary information in their annual reports (Brown and Degas, 1 998; Nee et al. , 1998; Guthrie and Parker, 1989; Wiltshire and Frost, 2000; Cornier and Gordon, 2001 This engenders businesses to operate in a socially and environmentally responsible manner (Brown and Degas, 1998; Spiller, 2000).

    Social and environmental reporting has principally been a voluntary or non-mandatory practice for the corporate (Wiltshire and Frost, 2000). Many firms have implemented environmental reporting as part of their annual report through the development of environment management system (Wiltshire and Frost, 2000; Degas and Gordon, 1996; Gray et al. , 1995; Guthrie and Parker, 1989). On the other hand, not much attention has been shown by corporate management on social reporting.

    In Fiji, the government has regulated its own environment policies such as the “Environment Management Act 2005″ (effective from 2007), The Environment Management (Waste Disposal and Recycling) Regulations 2007” and “The Environment Management (EIA Process) Regulations 2007” (Source: Ministry of Environment, Fiji). Furthermore, employment decree and AS 8000 has been implemented whereby the focus is generally on both, for current and potential employees.

    Other voluntary disclosure by corporate would include voluntary reporting on intellectual capital, employees, land, government development agencies, customers, shareholder and other community groups. Financial Accounting Standard Board had provided necessary guidelines FAST, 2000) to encourage corporate to make disclosures in additional of the requirements in the annual reports that are relevant to different stakeholders group (Meek et al. , 1995; Baronet al. , 2006). Limited research and evidence exists with regards to the voluntary disclosure in developing country context.

    The main aim of this study is to apply some consistency to the investigation of voluntary disclosure in the annual report by the Fijian companies listed in the South Pacific Stock Exchange. As such it aims to analysis the following from 2009 to 2014: The number of companies voluntary closing information that is useful (apart from financial information) to the stakeholders. The area of voluntary disclosure information covered in annual reports to reason their nature of activity. The history of voluntary disclose with the companies.

    The data used were from the years 2009 to 2014 annual reports of the listed companies listed on South Pacific Stock Exchange. The motive of this study is to provide a comprehensive result on voluntary disclosure that would be helpful for the stakeholders to make decision on whether they are getting excess disclosures r limited disclosure to legitimate their activities (Raman, 2000; Kinsmen& Gray, 1998; Hosing et al. , 1995). TAT (Avoidance Fiji) is a listed company on the ESP. and thus this study will also focus on its voluntary disclosure to the relevant stakeholders.

    The other part of this paper first discusses the literature studies on voluntary disclosure followed by the conceptual framework that guided the research process and the stud’s research method. In the later part research results are presented followed by discussion of the results and their implications for further research in the final section. . 0 LITERATURE REVIEW Various regulations exist that require companies to disclose obligatory information in their annual reports (Brown and Degas, 1 998; Nee et al. , 1998).

    On the contrary, it is highly unlikely for the mandatory information to include all information that would be useful for the stakeholders. Petty , 2005 states that “given that firms are not required by accounting standard or by law to report on most of their voluntary disclosures, they may voluntarily elect to disclose such information”. Various reasons have been provided in the literature o support company’s decision to provide excess information than required. Jensen &Meckling, 1976; Hosing et al. 1994 argued the voluntary disclosure reduces agency cost while Fisherman &Hagerty, 1989 argues that it can improve market price of securities. Global financial crisis and corporate failures such as Enron and HI Australia, which had adversely affected the society, thus the demand for companies to report excess financial reporting and mandatory obligations has increased (Smith et al. , 2005; Sick, 2009). Voluntary disclosure provides relevant information which enables stakeholders to make informed and effective decisions as stakeholders cannot easily access company information.

    Lou et al. , 2006 states that access to greater disclosure information influences markets expectations. Moreover, stakeholders are placing greater importance on companies voluntarily disclosing information, especially in regards to corporate social responsibility disclosures (Mob’s, 2005). These corporate social disclosures include information on environment, community, customers and employees. It is no longer considered a traditional disclosures made by companies in terms of financial information for investors and creditors (Smith et l. , 2005).

    The modernized trend voluntary information on socially responsible disclosures enhance market performance, managerial legitimacy, and corporate social responsibility as there is a social contract between the company and society (Mob’s, 2005). The voluntary disclosure seems to meet the values and beliefs of society thus showing that the company is concerned with the greater environment in which it operates (Hawaiian& Cooke, 2005). Hosting al. , (1995) believe that if companies are attempting to attract investors, they will increase the disclosure of voluntarily information.

    Companies are nearly willing to voluntarily disclose additional information if they recognize there are benefits for the company (Parakeet al. , 2006). However, due to fear that non-disclosure and the delay of disclosure will lead to litigation costs or create a perception that the bad news is worse than it actually is; companies will be willing to disclose unfavorable information as these costs outweigh the benefits (Racy& Vazquez, 2005). Voluntary Disclosure largely deals with social and environmental reporting.

    Corporations use additional disclosures to increasing their social validity (Milne and Patten, 2002). VT of information may append upon the organization’s willingness to communicate that information. On the contrary, Overreached (1983) and Dye (1985) argue that managers may withhold information even if it is desirable to disclose private information. Though much research has been done in areas of disclosure such as by Maharani (1998) and Allseed (2010) in Saudi Arabia & Egypt respectively and by Chamois (2000) in Zanzibar, limited studies has been conducted at voluntary disclosure practices in Fijian companies.

    Study by Andean (1992) revealed that accountants and corporate managers in Fiji were reluctant to incorporate social sues into their traditional accounting practice. Practitioners in Fiji revealed that limited advancement had been made on environment accounting in Fiji Lydia (2003). The developing countries lack social and environmental reporting practices than the developed nations Lydia (2000). Raman (2000) studies shows that majority of sampled organizations in Ghana did not provide social and environmental reporting in their annual report, though considered voluntary and if reported was only qualitative information.

    The global research community knows little about so many countries and thus this study thus the IM of this study, like Kinsmen& Gray (1998), Imam (1999) and Raman (2000), is to make known the voluntary disclosure in a Fijian based context. 3. 0 METHODOLOGY The research data were collected from the annual reports of all 18 companies listed on the South Pacific Stock Exchange (ESP.) – Fiji. As public companies are listed on the South Pacific Stock Exchange, reasonable information on these companies were available in its website for the public to access.

    The industries vary from food and household, beverage, insurance, telecommunications, transport, manufacturing, timber to natural resources. The annual reports f biblically listed companies are audited by an independent auditor which ensures that the annual report information is consistent with the audited financial statements, thus it is considered reliable information. Online Research – various relevant websites were accessed, and items were down loaded as data to analyze the research.

    Information was collected at global level Library Research – various articles and journal from the library were used to gain a better understanding on the research problem. Archives – annual reports of the listed companies on South Pacific Stock Exchange were analyses to establish he number of companies disclosing corporate social responsibility information and the level of information disclosed. Official newsletter of the Avoidance TAT Foundations Fiji was used to analysis the level for CARS engagement. 3. LIMITATIONS The research has some limitations which stem from the sample size. The results were based on 18 listed companies in Fib’s Stock Exchange. Therefore, care needs to be also exercised in generalizing too much from the results of this study. It has been argued that the annual report is not the sole disclosure medium utilized by companies (Merman, 2000). It has also been noted that attempting to capture all communication in a range of disclosure mediums may be problematic (Zeal& Aimed, 1990). 3. LEGITIMACY THEORY AS AN EXPLANATORY THEORY FOR VT Organizational legitimacy theory assumes that corporations will do whatever they deem as necessary in order to preserve their image of a legitimate business with legitimate aims (De Fillers & Van Stated, 2006). Gray, Owen and Adams (1996, p. 45) point out “information is a major element that can be employed by the organization to manage (or manipulate) the stakeholder in order to gain their purport and approval, or to distract their opposition and disapproval. Degas, Rankin babyhood (2000) conform the notion that legitimacy is about disclosure. The way legitimacy theory is generally utilized in the literature suggests that organizations will continue to make their voluntary disclosure or make more voluntary disclosure to ensure that their legitimacy is not threatened (De Believers and Van Stated, 2006). Legitimacy theory posits that organizations seek to ensure that they operate within the bounds and norms of their respective societies (Brown &Deegan, 1998;

    Guthrie & Parker, 1989; Wiltshire& Frost, 2000; O’ Donovan, 2002; Dwyer, 2002). Low legitimacy can have direct consequences for an organization, which may ultimately lend to the forfeiter of the right to operate (Tilling, 2004). The idea of a social contract between business and members of society demonstrate that while the main aim of a business may be to make profits, it also has a moral obligation to act in a socially responsible manner (Donovan, 2002).

    Brown and Degas (1998) further report that if an organization cannot justify its continued operation, then the community may revoke its “contract” to continue TTS operations. This may take form such as consumers reducing or eliminating the demand for the business products, factor supplier eliminating the supply of labor and financial capital to the business or constituents lobby government for increased fines, taxes or laws to prohibit those actions which do not conform to social expectations (Brown , 1998).

    The business forms therefore needs to disclose sufficient information for society to evaluate whether it is a good corporate citizen (Guthrie & Parker, 1989). In brief, the extent and type of voluntary disclosure in the annual report is, Hereford, likely to be relate to management’s perception about the concerns of community, from a legitimacy perspective. The intention behind this paper is to examine whether voluntary disclosure of information is made by Fijian firms for legitimacy reasons and whether corporate management in Fiji reacts to community expectations. . 0 Avoidance TAT Foundation Fiji and CARS As a mobile telecommunications organization, Avoidance’s is responsible for providing exceptional products and services for its customers. It has to consider how it carries out operations in order to build trust with its consumers, employees and other stakeholders. It aims to act responsible in everything it does, being a good citizen in the communities where it operates, and making sure it gets the best employees by providing the best working environment. Its main key objective is to be a responsible company.

    Avoidance is committed to high standards of ethics, corporate social responsibility and corporate governance that are considered critical to business growth and integrity. The company does not treat CARS as a gesture or add-on; it is part of its core business to achieve sustainable organization success. Avoidance’s success is supported by its commitment to ethical conduct in the way it interacts with stakeholders and the way it carry on its business operations. Pressure has been continuously applied on telecommunication industry to improve business ethics through new public initiatives and laws.

    There are many important ethical and social responsibility developments that forced Avoidance to continuously incorporate and update their corporate social responsibility policies. Avoidance takes a strategic approach to its ethical and corporate responsibility issues. It has a much publicized and unique CARS policy, and its social responsibility strategy is genuinely and carefully conceived. There are also some external environmental factors that have impacted on Avoidance’s business operations worldwide. The importance of these factors has made the company change and updates its ethical and socially responsible approach.

    Traditionally, companies disclose environmental information through print- media such as annual reports, standalone environmental reports, stand- alone corporate social responsibility reports, press releases, news media, advertisements, glossy booklets, newsletters, internal magazines and brochures Z©goal and Aimed, 1990; Tilt, 2001; Lydia, 2005). Lydia (2006) has defined corporate environmental reporting (CERT.) as a process through which “companies often disclose environmental information to their stakeholders to provide evidence that they are accountable for their activities and the resultant impact on the environment. After the advent of Internet, companies have started disseminating environmental information on their corporate websites. Avoidance TAT Foundation Fiji is the main framework with which the amalgamated telecommunication industry in Fiji aims to give back to its society and be socially expansible for its act. Some of the initiated responsibilities relating to Social and Environmental projects taken up by Avoidance Fiji: Environment The foundation has funded the disaster affected people in New Zealand after the earthquake. Its other funding includes the tank installation in Buy and Cadaverous.

    The Avoidance TAT Fiji Foundation backed Rotary Pacific Water for Life Foundation has put in six projects ranging from dam commissioning to tank installation and piping worth $67,000. 00. The Lions Club of Labs received $15,000. 00 from the Avoidance TAT Fiji Foundation under the Avoidance Red Alert Project. The world is out to plant a billion trees is also a programmer aimed towards a greener environment. Giving Back Since its early days, Avoidance Fiji has been committed to doing business in responsible ways and ensuring that both the environment and society are better off as a result of its actions.

    Community Giving The Acute Surgical Ward of the CM Hospital received a face-lift after a donation of $12,689. From the Foundation . Deckhands Vito Primary School was helped with its first set of three new computers from the Foundation. Health Extending its range of unhealthy services, the Foundation has launched enhancer a SMS-based service which aims to steer people away from cancer through railings awareness. Opposing to this benefits to the society Avoidance Fiji does not provide information on disposal methods of its non- usable mobile phones.

    Burning or burning can have serious effect on the environment. The rays generated from the Avoidance network are serious to one’s health. Large towers are built at interior village sights which when operational produces ultra-rays / radiation in the environment where people lives and it may affect them and would only be known at a later stage. These rays can possibly cause cancer or skin infections. To compensate for the tower villages at village halls are built in the name of assisting the villages.

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