Sustainability and balanced scorecard reporting: what determines public disclosure decision?

The purpose of this study is to investigate whether companies providing sustainability report (SR) also publicly report their balanced scorecard (BSC) implementation/adoption and to examine if there is any correlation between BSC disclosure, market perception, size and industry. To facilitate an exploratory analysis, we focus on the top 100 publicly listed firms in Australia. Two seemingly competing predictions from voluntary disclosure theory and sociopolitical theories adopted in sustainability/environmental reporting literature are considered and used as complementary theories in this study. The results show that BSC disclosure increased from 2007 to 2008 despite the onset of the global financial crisis. Although all BSC disclosers also provide SRs, only around half of the SR disclosers also disclose their BSC publicly in both years. Logistic regressions for 2007 and 2008 are conducted to ascertain if the financial crisis has affected BSC public disclosure decisions and its association with the variables of interest. The analyses show, for both 2008 and 2007, that size and industry prominence are positively and significantly related to BSC disclosure supporting predictions from socio-political theories. Suggestions that the BSC disclosers outperform the non-disclosers in terms of shareholder returns holds true in 2007 but not in 2008 suggesting that the financial crisis may have introduced more volatility to overall market performance.