Websites can influence investment
Are companies using web-based features to shape the way investors perceive their corporate social responsibility (CSR) information?
This was the question posed by AUT Faculty of Business, Economics and Law Accounting experts Dr Sabrina Chong and Professor Asheq Rahman.
Their findings show companies use a range of web-based features to emphasise certain CSR information.
The five web-based features examined by Chong and Rahman are: location on the website, accessibility of information, presentation of information (e.g., photos, commentary), range of information disclosed and extent of information (e.g., number of words dedicated to sustainability).
They found that, by strategically using these features, companies can position their web-based CSR content to be noticeable, eye-catching and easy to navigate to, bringing the CSR information to the forefront of investors' minds.
What are the implications – for companies and investors – of these web-based reporting methods? The research shows that enhancing CSR information dissemination via specific web-based features improves visibility of the information and positively influence investors' impression of the companies. Investors are likely to make investment decisions in favour of the companies, resulting in better capital market performance.
Chong and Rahman say their study has the potential to benefit preparers of CSR information, as well as investors and policy makers. Specifically, preparers will be more aware of web-based features that could be useful in projecting CSR information to their investors.
"Preparers of corporate information need to know not only what to say but also how to say it. Investors, in turn, need to be aware of the potential difference between attractive CSR content and actual CSR activities – before they make investment decisions. Policymakers could promote guidelines for web-based CSR reporting to help improve the quality of information dissemination," says Chong.
Read Web-based impression management? Salient features for CSR disclosure prominence