Do well-reputed companies carry out higher quality social reporting? An empirical approach

Abstract

Purpose – The purpose of this research objective was to analyse social reporting within MERCO Business companies both from the point of view of the quantity of information disclosed and the references about their quality. This approach constitutes a novelty with respect to previous literature on the subject. Design/methodology/approach – This paper assesses how social reporting is being carried out by the companies included in the MERCO Corporate Reputation Business Monitor, MERCO Business, during the period 2014–2016. The methodological design include the construction of a weighted index based on two unweighted indexes related to the quantity revealed and the quality detected. In addition, this study integrates intellectual capital and social responsibility approaches in order to deep into these voluntary disclosures. Findings – While social reporting is considerable from a quantitative point of view within MERCO Business companies, they do not reach very high levels of quality, which is good to counteract the final value of the quantity–quality index that the authors’ propose. Research limitations/implications – In MERCO Business companies, quantity is not a proxy for quality within social reporting. In this sense, only considering both dimensions it will be possible to assess these disclosures in a more complete way. Practical implications – This study allows a more accurate and comparable view of social reporting than those studies that only focus on how much information is disclosed. Besides, it involves an important advance in the identification of the relative quality of social reporting, opening a new line of research that will be key to comparing this type of disclosures in a more homogeneous way. Likewise, the results can be applied in future studies in the intellectual capital field given the complementarity between both types of disclosures. Social implications – Likewise, these results will be of interest for future actions aimed at regulating the improvement of the quality of social reporting in the hands of managers, investors and regulators. Originality/value – The authors have tested the value of quality in social reporting using a weighted index amongst the most reputable companies in the Spanish scenario. These disclosures have been compared with and without the use of it in order to deduce its value to obtain valid conclusions about social reporting.