Australian corporate political donation disclosures: frequency, quality, and characteristics associated with disclosing companies

Edward Tello, James Hazelton, Shane Vincent Leong

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Purpose: A primary tool for managing the democratic risks posed by political donations is disclosure. In Australia, corporate donations are disclosed in government databases. Despite the potential accountability benefits, corporations are not, however, required to report this information in their annual or stand-alone reports. The purpose of this paper is to investigate the quantity and quality of voluntary reporting and seek to add to the nascent theoretical understanding of voluntary corporate political donations. Design/methodology/approach: Corporate donors were obtained from the Australian Electoral Commission database. Annual and stand-alone reports were analysed to determine the quantity and quality of voluntary disclosures and compared to O’Donovan’s (2002) legitimation disclosure response matrix. Findings: Of those companies with available reports, only 25 per cent reported any donation information. Longitudinal results show neither a robust increase in disclosure levels over time, nor a clear relationship between donation activity and disclosure. The findings support a legitimation tactic being applied to political donation disclosures. Practical implications: The findings suggest that disclosure of political donations in corporate reports should be mandatory. Such reporting could facilitate aligning shareholder and citizen interests; aligning managerial and firm interests and closing disclosure loopholes. Originality/value: The study extends the literature by evaluating donation disclosures by companies known to have made donations, considering time-series data and theorising the findings.

Original languageEnglish
Pages (from-to)581-611
Number of pages31
JournalAccounting, Auditing and Accountability Journal
Volume32
Issue number2
DOIs
Publication statusPublished - May 2019

Keywords

  • Australia
  • Campaign finance
  • Corporate political donation
  • Legitimacy theory
  • Political contribution
  • Social and environmental accounting disclosures

Cite this

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title = "Australian corporate political donation disclosures: frequency, quality, and characteristics associated with disclosing companies",
abstract = "Purpose: A primary tool for managing the democratic risks posed by political donations is disclosure. In Australia, corporate donations are disclosed in government databases. Despite the potential accountability benefits, corporations are not, however, required to report this information in their annual or stand-alone reports. The purpose of this paper is to investigate the quantity and quality of voluntary reporting and seek to add to the nascent theoretical understanding of voluntary corporate political donations. Design/methodology/approach: Corporate donors were obtained from the Australian Electoral Commission database. Annual and stand-alone reports were analysed to determine the quantity and quality of voluntary disclosures and compared to O’Donovan’s (2002) legitimation disclosure response matrix. Findings: Of those companies with available reports, only 25 per cent reported any donation information. Longitudinal results show neither a robust increase in disclosure levels over time, nor a clear relationship between donation activity and disclosure. The findings support a legitimation tactic being applied to political donation disclosures. Practical implications: The findings suggest that disclosure of political donations in corporate reports should be mandatory. Such reporting could facilitate aligning shareholder and citizen interests; aligning managerial and firm interests and closing disclosure loopholes. Originality/value: The study extends the literature by evaluating donation disclosures by companies known to have made donations, considering time-series data and theorising the findings.",
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Australian corporate political donation disclosures : frequency, quality, and characteristics associated with disclosing companies. / Tello, Edward; Hazelton, James; Leong, Shane Vincent.

In: Accounting, Auditing and Accountability Journal, Vol. 32, No. 2, 05.2019, p. 581-611.

Research output: Contribution to journalArticleResearchpeer-review

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