The Research On The Social Responsibility Information Disclosure In China's Listed Companies

In the nineteen sixtieth of 20th century, people from all levels of the society started to pay attention to Corporate Social Responsibility due to the exposed shortcomings in industrial evolution. China, on the other hand, started the research regarding the CSR in 1980th, which focused on how to arouse the enterprise social responsibility awareness and theoretical study. However, there were not so many examples in the real world and the social responsibility information was not fully exposed to the society. Recently, Under this circumstance, Chinese Academy started various researches on CSR. This paper provides some suggestions for government and non-government organizations and also enterprises, through combining standard research and empirical research from 68 companies listed in Shanghai Stock Exchange and analyzing the relationship between the overall status and social responsibility and financial performance.The first part defines CSR, Social responsibility accounting and social responsibility information disclosure based on the scientists'research as well as the environment we have in China. The paper define CSR as company has to take responsibility for its employees, consumers, society and environment besides creating profit and take responsibilities to share holders. The CSR for a company requires the company to pay more attention to human value and contribute more to consumers, employees, environment and society.The second part of this paper is based on stakeholder theory and sustainable development theory. It shows the research trend and the hot spot that the society has to CSR by the content, form, affecting factors and financial outcomes. In recent years, we have more and more research on society research, but we still do not have as much research as western countries do, also, we use foreign ideas mostly, which leads to a shallow analysis to our special policy and background. At the same time, most of domestic studies are not systematic, the research ideas are disorder and loose, and not formed a complete theoretical system, the research on social responsibility information disclosure which aims at China's specific national conditions is under heavy responsibility and a long way.Then in the third part of this paper, sum up the relevant guidelines and standards of the social responsibility information disclosure from international and domestic point of view, introduce two international standards in detail:the SA8000 and Global Compact, and sum up the domestic norms and standards mainly from governmental organizations, trade associations, stock exchanges, the enterprise itself and thus have a clear understanding of the study background in this paper.The empirical study in the forth part of the paper, is based on the first three parts of the study, and sets a foothold on the status and institutional background of China's listed companies, to analysis China's listed companies' realities of social responsibility information disclosure, and to test the relationship among social responsibility information disclosure and financial performance, and to excavate the motivational reason for corporate disclosure of social responsibility, so as to make useful suggestions to organizations and business at all levels. This part carries on research from two aspects, the first part is to build CSRI (Corporate Social Responsibility Index), and do description statistics to it; the second part is to study the correlation between social responsibility information disclosure and financial performance.The paper uses layer random sampling to sample the 676 companies listed in Shanghai Stock Exchange in 2006,2007 and 2008, and we randomly choose 68 companies and 204 samples from the pool. We first get the social responsibility information to five different kinds:employee, relative holding stockholders, creditors, consumers, environment protection, community and charity based on the report of the board, company admin report, social responsibility condition, important event and notes to the financial statement. Then we classify the five kinds of social responsibility information to three second level class, which is fifteen second class subjects and at last we gave quantity information a value of two, not quantity information a value of one and no social reasonability information a value of zero, the total score for all different levels makes the total score for a company, which is CSRI. Based on the CSRI, this paper carries out description statistics from three aspects: the overall level of social responsibility information disclosure index, the broad categories score of social responsibility information disclosure and the social responsibility information disclosure index among sub-sectors. Studies have shown that, the level of social responsibility information disclosure of China's listed companies improved year by year, especially in 2008, CSRI have significant increase over the previous two years. However, because in 2008 government and Shanghai Stock Exchange issued a series of information disclosure policies which aimed at different enterprise nature and China had experienced more large-scale public crisis, each company is uneven in disclosure, the gap is widening. The listed companies varies widely in form, content, and bearing the main areas of social responsibility information disclosure, many companies are only concerned with the relationship with shareholder, creditors, consumers, employees and others who is directly related to the interests of the company, but ignore the fulfillment of environment protection and public welfare, etc, The industries in which the information disclosure requirements for social responsibility of companies to disclose more is better. The enterprises in our country don't have sufficiently strong social responsibility sense as a whole, the relevant disclosure is lack of initiative.While we research the relevance between social responsibility information disclosure and financial performance in empirical study, this paper chooses ROE (Rate of Return on Common Stockholder's Equity) as dependent variable to reflect the company's financial performance, to build up CSRI as independent variable, and to introduce corporate size, corporate nature, asset-liability ratio, accounting earnings, the first controlling stake's shares proportion and the total shareholding ratio of the second to the fifth largest shareholders as control variable. For making a more comprehensive analysis of issues and making the empirical conclusions more convincing, this paper adopts a annual cross-sectional data and panel data respectively to make regression analysis, to make up for the limitations of only using cross-sectional data in most studies, drawing a conclusion from both the current and long-term perspective, having some guidance to carry out policies in long-term. The result that sub-annual cross-sectional data shows that from the current perspective of disclosure of social information, the relationship between CSRI and short-term financial performance is unstable, may be positively correlation, may be negatively correlation. Later before analysis to panel data in the paper, first takes Unit Root Test and Cointegration Test, when comes to conclusion that exists long-term stable equilibrium relationship among variable, using Hausman Test to determine the panel model, to build random effects variable intercept model, the results of regression shows that by adding the time factor, that is, from long term, corporate social responsibility information disclosure will cause a positive change in financial performance, but not obvious, reflecting that social responsibility have a certain lag and long for the positive impact on the financial performance.The last part of the paper based on the research conclusion above, makes policy recommendations to improve social responsibility information disclosure for government agencies, stock exchanges and enterprises. For the difficulties of gathering social responsibility information when writing the paper, this paper suggests that government, Stock Exchange and other institutions should give a unified provision on the form, content, main bearer of social responsibility information disclosure, to enable companies to prepare a report in accordance with certain criteria, in order to facilitate the outside users intake social responsibility information. The phenomena which is demonstrated in his paper shows that many companies of the Shanghai Stock Exchange based on the issues of cost and others factors, the disclosure of social responsibility information is not initiative, not comprehensive, too narrow on the disclosure scope, most companies neglected the disclosure of environmental protection, community and public welfare. In response to these phenomena, it is suggested that listed companies should enhance the sense of social responsibility, fully understand the meaning and significance of social responsibility, establish a long-term awareness, improve initiative and enthusiasm of fulfill the social responsibility, as in the long run fulfilling social responsibility can bring positive changes in financial performance, the results of empirical study has confirmed this. Since empirical studies have shown that in the long run fulfilling social responsibility will help companies to improve financial performance, while in present, many enterprises have not realized this point, so it is not enough to improve the social responsibility report only through the consciousness of listed companies, regulators need to make a mandatory requirement, to improve the disclosure level of China's social responsibility report. Therefore, this paper agrees with the attempts that the three types of companies must disclose social responsibility reports took by Shanghai Stock Exchange by the end of 2008, meanwhile, the article supports the objectives and requirements to promote the social responsibility of companies to disclose all the Shanghai stock market report in two or three years proposed by Shanghai Stock Exchange. However, it suggests that mandatory regulatory authorities must fully considered the additional burden to enterprises before their compulsory requirements. Otherwise, different industries adopt different compulsory measures of the company, so that enterprises can fulfill our social obligation and maximize their value at the same time.