Narrative Analysis of Annual Reports—A Study of Corporate Social Disclosure in the Pre- and Post-Mandate Period

Abstract

Narrative analysis of annual reports has been of interest, especially with the emergence of corporate governance and disclosure norms across the world and with the emergence of International Integrated Reporting. There are five genres of narrative analyses around annual report texts: subjective analyst ratings, disclosure index studies, thematic content analysis, readability studies, and linguistic studies. For this study, we used a constructed disclosure index to analyze and compare the level of annual report disclosure with respect to Corporate Social Responsibility (CSR) activities for selected companies in India before and after the legal mandate. Four sections of the annual reports, namely Chairman’s Message, Separate section for CSR, Director’s report, and Management discussion and analysis of the 102 most valuable companies were analyzed. The study revealed the segment on “Chairman’s Message” was the least popular location for CSR disclosure and the segment “Director’s report” was the most popular location for CSR disclosure. Environment appeared to be the most popular CSR activity disclosed by the companies in their annual reports and “others” was the least popular CSR activity disclosed by the companies in their annual reports taking all the segments together. The study revealed an average CSR Disclosure Index (CSRDI) of 54% for the six years under consideration. For 96.08% of the companies under consideration, average CSRDI had shown a significant increase in the post-mandate period (2014–15 to 2016–17) as compared to the pre-mandate period (2011–12 to 2013–14).