Examining the Link between Stakeholder Accountability and Sustainability Reporting: A case study of five organizations in the nonprofit sector
Purpose: In this study, we aim investigate why and how sustainability reporting practices has been adopted, or not adopted, in the nonprofit sector. By linking the process of sustainability reporting to the stakeholder accountability, we seek to understand how accountability is impacted by SR. Moreover, how the stakeholder dialogue is carried out in the case organization is assumed to impact stakeholder accountability, why this is an aspect which will be addressed. Methodology: In order to answer the main research question, a multiple case study characterized by both exploratory and explanatory features has been conducted. The generated data has been collected through a dual data collection method consisting of both in-depth interviews and a systematic content analysis. Semistructured interviews have been conducted with all five case organizations, and as a complement to the interviews, we have analysed the sustainability related content in both annual reports and in separate sustainability reports. Theoretical perspective: Accountability is the foundation to our analytical model. The concept of sustainable development and the practice of sustainability reporting is essential to the study. Accountability and sustainability reporting are linked together in a section referring to accountability mechanisms. Accordingly, with the applied analytical model (Fig.1), stakeholder participation is considered a factor which influence accountability. Lastly, institutional theory is presented and will act as a theoretical lens when analysing the findings. Empirical result: Different reasons have been found to affect the establishment of SR and we have identified a link between the NPOs’ operational purposes i.e. social agendas and what information is disclosed. NPOs tend to report on the matters most closely related to one’s agenda and mission. The two main constraints to SR refers to, first of all, the process of prioritizing limited resources such as time, money and personnel available. Secondly, the lack of external and internal pressure. The drivers consists of the legitimacy gains from being perceived as more transparent alongside its beneficial role in improving internal processes. In addition to this, adopting SR practices makes you a good role model in the sector which further may boost your brand as a credible actor. Furthermore, majority of the respondents struggled to explain the stakeholder dialogue in detail and more importantly, how input is brought in to the SR process, which leave us to believe it can be improved. Conclusion: We have found that the lack of pressure from both laws, society and the organizations themselves, has been a major hinder for the adoption of SR. It has resulted in that SR is viewed as somewhat superfluous and remains rare in the sector. Thus, there is an extant confusion between working for the social good and working in a sustainable manner. It was shown that NPOs need to improve the stakeholder dialogue regarding SR as well as broaden the scope of SR to achieve better stakeholder accountability. In addition, our study suggests that SR can achieve upward accountability but SR is not an ideal forum for discharging downward accountability.
MSc in Accounting
Master Degree Project