Reporting on Human Rights by Large Corporates: Interplay Between Comprehensiveness and Narrative Manipulation

Abstract

Companies are often accused of using sustainability disclosures as public relations tools to manage financial and non-financial stakeholders' impressions. The purpose of our study was firstly to determine how comprehensive the human rights disclosures of a sample of large international companies were and secondly, whether different narrative styles are associated with levels of disclosure to manage readers' impressions about the company. We analysed the public human rights disclosures for 154 large, international companies obtained from the UN Guiding Principles Reporting website. On average, companies complied with only one-third of the UN Guiding Principles Reporting Framework criteria. Communication about policies has the highest compliance, whilst communication about determining which human rights aspects are salient to the company, remedies for transgressions and stakeholder engagement have the lowest disclosure. When we split the sample between high disclosure and low disclosure companies, we found that the readability of the human rights disclosures is exceptionally low and even more so for low disclosure companies. Low disclosure companies used words implying Satisfaction significantly more than high disclosure companies, which provides some support for suspecting that low disclosure companies practise impression management by only presenting a ‘rosy picture’, as well as obfuscation via low readability. We add to the literature on impression management by large corporations in their sustainability reporting, and specifically human rights disclosures, by revealing how the interplay of low disclosure, low readability and overuse of words signalling Satisfaction contributes to impression management, rather than sincere attempts at accountability to all stakeholders.

Citation

Esterhuyse, L. and du Toit, E. (2023), "Reporting on Human Rights by Large Corporates: Interplay Between Comprehensiveness and Narrative Manipulation", Seifi, S. and Crowther, D. (Ed.) Corporate Resilience (Developments in Corporate Governance and Responsibility, Vol. 21), Emerald Publishing Limited, Leeds, pp. 219-242. https://doi.org/10.1108/S2043-052320230000021011