Banks' CSR disclosures – headquarters versus subsidiaries

Abstract

Purpose

The purpose of this paper is to investigate how the 2008 financial crisis is reflected in the CSR disclosure quantity and readability of banks' headquarters and subsidiaries, and how banks' disclosure patterns differ across these units.

Design/methodology/approach

Embedded multiple case study utilising quantitative content analysis and readability indices.

Findings

As expected, Nordic banks' headquarters' disclosure quantity and readability outperforms those of their Baltic subsidiaries/branches. However, no convergence of intra-group CSR disclosure practices is detected. Banks' response to the legitimacy gap seems to depend on CSR reporting strategy: passive superficial (Baltic subsidiaries/branches, ABLV), passive thorough (Swedbank), intermediate (Danske Bank) and active (SEB). Passive and intermediate strategy pursuers' CSR disclosure quantity and readability remains stable during the financial crisis period. However, active strategy pursuers increase disclosure quantity and reduce readability indicating possible stakeholder manipulation attempts. Both intermediate and active strategy pursuers disclose in greater detail steps taken to improve CSR behaviour.

Research limitations/implications

Results may not be transferable to the pre-2007 period, to other contexts and to Western European subsidiaries.

Practical implications

Introduction of plain English into CSR communication could enable to decrease stakeholder manipulation attempts made through CSR texts.

Originality/value

Previous studies have not investigated CSR disclosures of banks operating in the Baltic countries and globally have not focused on their readability, headquarter-subsidiary differences and 2008 financial crisis contexts.

Citation

Laidroo, L. and Ööbik, U. (2014), "Banks' CSR disclosures – headquarters versus subsidiaries", Baltic Journal of Management, Vol. 9 No. 1, pp. 47-70. https://doi.org/10.1108/BJM-05-2013-0091