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In Search Of Disclosure Effects Of The Siemens Ag’S Corruption Scandal

Listed author(s):
  • Renata Blanc


    (University of Porto, Faculty of Economics)

  • Manuel Castelo Branco


    (University of Porto, Faculty of Economics, OBEGEF)

  • Charles H. Cho


    (ESSEC Business School)

  • Joanne Sopt


    (ESSEC Business School)

In this study, we examine the changes in disclosure practices at Siemens AG—a large German multinational corporation, on compliance and the fight against corruption over a period of 11 years during which two significant corruption-related events occurred: (1) the issuance of the 10th principle on the fight against corruption, which can constitute an exogenous shock and thus potentially create positive adjustments to a company’s reputation; and (2) the occurrence of a major corruption scandal at Siemens in 2006, which had a negative external impact. Through a content analysis of the company’s annual reports and sustainability reports from 2000 to 2011 and under the lens of legitimacy theory and media agenda setting theory, our findings suggest that Siemens changed its compliance and corruption disclosure practices to manage its legitimacy in the wake of the 2006 corruption scandal and in subsequent years. The strategies adopted by Siemens may be described as both symbolic and substantive (see Dowling and Pfeffer, 1975; Ashforth and Gibbs, 1990; Rodrigue, Magnan and Cho, forthcoming). The implications emanating from this study seem therefore relevant for several key societal stakeholders in that they could at least provide additional arguments for the need of better regulations to ensure the disclosure of relevant, reliable and consistent corporate information about important social issues such as corruption—a serious economic, social, political and moral issue (Argandoña, 2007).

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Paper provided by OBEGEF - Observatório de Economia e Gestão de Fraude & OBEGEF Working Papers on Fraud and Corruption in its series OBEGEF Working Papers with number 015.

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Length: 21 pages
Date of creation: Jan 2013
Handle: RePEc:por:obegef:015
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  1. Haniffa, R.M. & Cooke, T.E., 2005. "The impact of culture and governance on corporate social reporting," Journal of Accounting and Public Policy, Elsevier, vol. 24(5), pages 391-430.
  2. Patten, Dennis M., 2002. "The relation between environmental performance and environmental disclosure: a research note," Accounting, Organizations and Society, Elsevier, vol. 27(8), pages 763-773, November.
  3. Aerts, Walter & Cormier, Denis, 2009. "Media legitimacy and corporate environmental communication," Accounting, Organizations and Society, Elsevier, vol. 34(1), pages 1-27, January.
  4. Hens Runhaar & Helene Lafferty, 2009. "Governing Corporate Social Responsibility: An Assessment of the Contribution of the UN Global Compact to CSR Strategies in the Telecommunications Industry," Journal of Business Ethics, Springer, vol. 84(4), pages 479-495, February.
  5. Patten, Dennis M., 1992. "Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory," Accounting, Organizations and Society, Elsevier, vol. 17(5), pages 471-475, July.
  6. Muhammad Azizul Islam, 2009. "Grameen Bank's social performance disclosure: Responding to a negative assessment byWall Street Journal in late 2001," Asian Review of Accounting, Emerald Group Publishing, vol. 17(2), pages 149-162, July.
  7. Cho, Charles H. & Roberts, Robin W. & Patten, Dennis M., 2010. "The language of US corporate environmental disclosure," Accounting, Organizations and Society, Elsevier, vol. 35(4), pages 431-443, May.
  8. Gul, Ferdinand A. & Leung, Sidney, 2004. "Board leadership, outside directors' expertise and voluntary corporate disclosures," Journal of Accounting and Public Policy, Elsevier, vol. 23(5), pages 351-379.
  9. Charles Cho, 2009. "Legitimation Strategies Used in Response to Environmental Disaster: A French Case Study of Total SA's Erika and AZF Incidents," European Accounting Review, Taylor & Francis Journals, vol. 18(1), pages 33-62.
  10. Gerardo Patriotta & Jean‐Pascal Gond & Friederike Schultz, 2011. "Maintaining Legitimacy: Controversies, Orders of Worth, and Public Justifications," Journal of Management Studies, Wiley Blackwell, vol. 48(8), pages 1804-1836, December.
  11. de Villiers, Charl & van Staden, Chris J., 2006. "Can less environmental disclosure have a legitimising effect? Evidence from Africa," Accounting, Organizations and Society, Elsevier, vol. 31(8), pages 763-781, November.
  12. Patten, Dennis M., 1991. "Exposure, legitimacy, and social disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 10(4), pages 297-308.
  13. Manuel Branco & Lúcia Rodrigues, 2008. "Factors Influencing Social Responsibility Disclosure by Portuguese Companies," Journal of Business Ethics, Springer, vol. 83(4), pages 685-701, December.
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