The Three Pillars of Corporate Social Reporting as New Governance Regulation: Disclosure, Dialogue and Development

Abstract

In this article I examine corporate social reporting as a form of New Governance regulation termed democratic experimentalism. Due to the challenges of regulating the behavior of corporations on issues related to sustainable economic development, New Governance regulation - which has a focus on decentralized, participatory, problem-solving-based approaches to regulation - is presented as an option to traditional command-and-control regulation. By examining the role of social reporting under a New Governance approach, I set out three necessary requirements for social reporting to be effective: disclosure, dialogue with stakeholders, and the moral development of the corporation. I then assess current social reporting practices against these requirements and find significant problems. In response, I propose one option for solving those problems, and encourage future researchers to consider the demands of these three requirements and the possible trade-offs between them when attempting to find ways to improve social reporting practices.

Keywords: Corporate social responsibility, Global Reporting Initiative, social reporting, sustainability reporting, regulation

JEL Classification: G38, K20, K29, L50, M14