Correlates of corporate accountability among South Africa's largest listed companies

Abstract

This paper explores the relationships between a publicly available measure of corporate accountability (the Accountability Rating™) and a range of other corporate variables for the largest 50 companies in South Africa. The rationale for this was to consider empirical evidence for a number of the major theoretical movements in the realm of corporate responsibility. The relationship between accountability and company financial performance was assessed for evidence to support either the stakeholder or slack resources theories. The relationships between accountability and company size and proxy institutional field variables were examined as evidence that institutional fields may represent strong drivers for corporate accountability. Finally, the relationships between accountability and executive remuneration variables were examined for evidence of agency issues. No significant relationships between accountability and financial performance variables were detected, suggesting that neither the stakeholder theory nor the slack resources theory was likely to be a crucial driver of accountability in this sample. Statistically significant relationships between accountability, on the one hand, and company size and the institutional proxies of industry sectors and multiple securities exchange listings, on the other, suggested the centrality of a company's institutional field in motivating socially responsible corporate behaviour. Findings in terms of executive remuneration were ambiguous and justify further investigation.