Advertising and Social Responsibility in the Lebanese Market

Topics: Corporate social responsibility, Advertising, Social responsibility Pages: 30 (9519 words) Published: April 18, 2012
CORPORATE SOCIAL RESPONSIBILITY (CSR) DISCLOSURE OF ADVERTISING AGENCIES An Exploratory Analysis of Six Holding Companies’ Annual Reports David S. Waller and Roman Lanis ABSTRACT: The corporate annual report has become more than a mandatory financial report for public companies, with many companies also using it as an important marketing tool. As corporate social responsibility (CSR) is an issue of growing interest in the business world, many publicly listed companies, including advertising agencies, are voluntarily disclosing information regarding their CSR activities in their annual reports. While there is criticism of the ethical values of advertising, some advertising agencies can use CSR to promote a positive side of the agency’s business. This descriptive study analyzes the annual reports of the top six holding companies in the global advertising industry to promote discourse and theory development in the area. This will be done by observing which advertising companies disclose their CSR activities and what activities they undertake, as well as the development of a CSR disclosure index for advertising agencies. The results indicate that some advertising companies do engage in CSR activities and disclose them in their annual reports, but the level of these CSR disclosures is different between the organizations.

It is a mandatory requirement for public companies in most countries to produce a financial report on a periodic basis for relevant regulatory bodies and shareholders. The financial report usually includes a director’s report, three financial statements (financial position, performance, and cash flows) and an audit report, as well as relevant notes to the accounts. With regard to the shareholders and other third parties, the mandatory reports are usually disseminated within the annual report, which may also contain nonmandatory information. Companies may also use the annual report as a marketing or communication tool for voluntary disclosure of nonfinancial information to their various stakeholders, including shareholders, employees, customers, suppliers, media and the government, and to develop a particular brand image for the organization (Berkey 1990; Hopwood 1996; Judd and Timms 1991; Neu, Warsame, and Pedwell 1998; Stanton and Stanton 2002). Over the years there has been an increase in voluntary disclosures, with changes in the design and content to include graphics, photographs, and disclosures relating to human resources, the environment, and the community (Marino 1995; Stanton and Stanton 2002; Ze’ghal and Sadrudin 1990). More recently, and coinciding with some major corporate ethical disasters, many companies have been including sections on governance, ethical practice, and social responsibility. David S. Waller (Ph.D., University of Newcastle) is a senior lecturer, Faculty of Business, School of Marketing, University of Technology, Sydney. Roman Lanis (Ph.D., University of Newcastle) is a senior lecturer, Faculty of Business, School of Accounting, University of Technology, Sydney.

Corporate social responsibility (CSR) disclosure has been the subject of substantial academic accounting research (Farook and Lanis 2005; Gray, Owen, and Maunders 1987). However, while there has been research relating to annual reports in general, little has been undertaken focusing on CSR disclosure by marketing/advertising companies (Stanton and Stanton 2002). While there are often criticisms of the ethics of advertising practice, including its effects on the more vulnerable sections of society (Belch and Belch 2007), it is important to see how the creators of advertising messages, which can influence many people in society, view their social responsibility, and if indeed they discharge their social accountability by voluntarily disclosing CSR information (Gray, Kouhy, and Lavers 1995). Thus, the point in question here is, Do advertising agencies disclose their CSR activities, and if they do, are there any systematic...
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