Corporate social reporting practices: the case of companies listed on the Nairobi stock exchange

Abstract

This study aimed at examining the corporate social reporting practices of companies listed in the Nairobi Stock Exchange in the year 2006. To achieve this, the researcher set out to investigate the extent of social reporting; the guidelines used in preparing social reports and assessing the quality of the social reports. The study was based on all the forty two companies that had been listed and were actively trading in the Nairobi Stock Exchange through out the year 2006. Primary data and secondary data were used to facilitate in the accomplishment of the stated objectives. Primary data was obtained through the use of questionnaires while secondary data was collected from the annual reports of listed companies. The extent and nature of corporate social reporting in annual reports was measured according to the number of sentences used. Corporate social reports disclosures were classified according to six key themes. The mode of presentation and the type of news disclosed were also investigated The research showed, in summative, that corporate social reporting in Kenya is of low quality and lacks completeness, uniformity and reliability. Most of the reporting is done in the annual reports in the corporate governance section. Only two companies prepared separate and stand alone reports. "The reports primarily focused on education, health and social and charitable activities. All the information was good news and no bad news was disclosed. The study concluded that corporate social reporting should be encouraged through ethical considerations and social agreements and through external auditing of the social reports. Auditing of the reports by specialized auditors and enactment of laws and ethical considerations will contribute greatly to the production of quality corporate social reports in Kenya.