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Disclosing elements of disclosure: a test of legitimacy theory and company ethics
Author(s) -
Lightstone Karen,
Driscoll Cathy
Publication year - 2008
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.50
Subject(s) - legitimacy , fiduciary , business ethics , test (biology) , accounting , business , investment (military) , order (exchange) , voluntary disclosure , sample (material) , public relations , law , political science , finance , politics , paleontology , chemistry , duty , chromatography , biology
This paper focuses on some of the ethical issues related to voluntary disclosure of qualitative information by Canadian public companies. Drawing on various organizational theories, we examine some of the ways that companies can symbolically manage legitimacy through disclosure. Press releases of a sample of companies that received cease‐trading orders were analysed for their use of language. We found that high‐risk companies attempted to manage legitimacy by selectively releasing information and by using ambiguous language. Moreover, some companies behaved unethically by using language that suggested a positive future despite the imminent release of a cease‐trading order. These findings have implications for organizational and accounting theorists and stakeholders in the corporate, fiduciary, and investment communities. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.