Moral versus pragmatic legitimacy and corporate anti-bribery disclosure: Evidence from Australia

Muhammad Islam* (Corresponding Author), Barry J Cooper, Shamima Haque, Michael Jones

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)
1 Downloads (Pure)

Abstract

This study examines how the notions of moral and pragmatic legitimacy explain the role of the Australian Stock Exchange (ASX) corporate governance guidelines on anti-bribery disclosure practices by Australian companies. In particular, by focusing on the largest 100 ASX-listed companies between 2001 and 2011, we aim to explore how the competing notions of pragmatic and moral legitimacy explain anti-bribery disclosure practices and how, during moments of crisis, managers, via anti-bribery disclosures, create a deficit of moral legitimacy in pursuing pragmatic legitimacy. This paper finds that generally anti-bribery disclosures respond to the ASX corporate governance disclosure guidelines – the norms that the broader community expects to be in place for businesses to be socially and ethically accountable. In particular, we find that when responding to the disclosure guidelines, managers are inclined to avoid disclosing actual incidents of bribery that have already been reported by the news media, consistent with avoiding possible financial penalties and protecting managerial and shareholders’ interests. Such a corporate response is a compromise between maintaining moral legitimacy and gaining pragmatic legitimacy. The lack of corporate response to incidents of bribery, in turn creates a deficit in moral legitimacy.

Original languageEnglish
Pages (from-to)30-56
Number of pages27
JournalAccounting Forum
Volume46
Issue number1
Early online date1 Jul 2021
DOIs
Publication statusPublished - 1 Jan 2022

Bibliographical note

Acknowledgements
We acknowledge CA ANZ for funding during the early phase of this project. We thank the journal editors and anonymous reviewers for their comments.

Keywords

  • anti-bribery disclosure
  • Australia bribery
  • moral legitimacy
  • pragmatic legitimacy

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