Non-financial information disclosure and communication in large UK companies.

This study aims to investigate the disclosure of non-financial information by UK companies in the
absence of regulatory and statutory requirements. The study focuses on answering two key questions: (1) whether UK companies disclose non-fiiiancial information to legitimise their corporate behaviours to their stakeholder groups, and (2) whether UK companies disclose nonfinancial
information to meet the information requirements of their stakeholder groups.
To start this study, traditional theories and concepts
used in the accounting literature are reviewed. The researcher takes the view that among the existing theories and concepts, legitimacy and stakeholder theories provide the best explanationf or the disclosure of non-financial
information by UK companies. While the arguments presented by the proponents of the legitimacy theory is
used to explain how companies may disclose information to present themselves as having the same norms and values as those of the society, the arguments in support of the stakeholder rheory are used to highlight the existence of different stakeholder groups and how companies attach
different importance to them. The author takes the view that if companies disclose non-financial information to their stakeholder groups, they should do so regardless of their corporate characteristics. To explore the reasons for the disclosure of non-financial information further, the quality of the disclosed non-financial information is heeded by considering two characteristics of 'Social and Ethical Accounting, Auditing and Reporting' (SEAAR), namely stakeholder identification and stakeholder dialogue. It is argued that if companies disclose
information to meet the requirements of their stakeholder
groups, they are expected to: (1) identify their stakeholder groups, and (2) hold dialogue with them.
Before startingt he empirical investigation, methodological isues that are believed to be relevant
to this research project are discussed wherein non-financial information categories are divided into two groups of governance and non-govemance. While governance in formation encompasses information categories on corporate managerial structures, non-governance information categories are on non-managerial aspects of companies and can be related to both external and internal
matters. Having decided on the non-financial information categories, the level of non-financial information disclosed by the Top 100 UK companies is measured for 1985,1990 and 1995. The findings show that the level of information disclosureh ad increasedin terms of both governance and non-governance in formation categories from 1985 to 1995.
The thesis proceeds by probing the two key questions. The question of whether companies disclose non-financial information to legitimise their behaviours is investigated by choosing a number of corporatec haracteristics and examining if either of these characteristicsis associated
with the level of non-financial information disclosed by UK companies. The observation of association between any of the corporate characteristics and the level of non-financial information disclosure is used to demonstrate how companies divulge information to legitimise those aspects of behaviours that are closely linked to their characteristics. The question of whether companies
report non-financial information to meet the information requirements of their stakeholders' groups is probed using questionnaire surveys. The questionnairews ere sent out to companies and two stakeholder groups, namely investors and employees. The responsesre ceived from the three groups castlight on stakeholder identification and the state of stakeholder dialogue.
According to the findings of this study, a number of corporate characteristics were associated with the disclosure of non-financial information illustrating that UK companies disclosed information to legitimise their behaviours to their stakeholder groups in the absence of any regulatory and statutory requirements. This was particularly the case for non-governancein formation. The
findings also suggest that UK companies attached more importance to their investors than to their employees and they met the information requirements of their investors despite holding a relatively higher level of dialogue with their employees.