The emphasis on a measurement culture led to repeatedly employ sets of predefined indicators that, by offering a vision of the results achieved in the face of the actions taken, were thought to be useful for measuring and evaluating the quality of the services delivered, and to reduce the information asymmetries that intrinsically characterize the relationship described in the previous paragraphs. However, it is important to clarify here that the use of a set of indicators is not in itself sufficient, given the undeniable limitations related to their failure in offering more than a faint description of processes and outcomes of a complex nature, such as those addressed in this study. The reason for this inadequacy is largely due to both the shortcomings related to information sources on which these indicators are based, and because there is a risk that the focus on these instruments could result in documenting only those dimensions that are technically measurable, omitting everything else, although relevant. Also, the use of such assessments is only limitedly helpful to understanding what actions should be taken, since the pressure towards the fulfilment of certain pre-defined quantitative standards, especially the financial ones, potentially amplifies opportunistic behaviours, to the detriment of the quality of services, and without considering the qualitative aspects that are difficult to relate to the objectives.
Hence, the danger is that the reporting, mainly based on indicators suffering the already mentioned limits, is likely to be somewhat redundant and extremely flawed, not really useful to gain a better understanding of the phenomena investigated and, instead, able to create confusion rather than clarity. Therefore, the recipients of information may find it difficult to take into account the explanations obtained, or worse, may give way to measures of various kinds not substantially supported and with possible negative effects, both at the system level and for the individual entities (Marshall et al., 2000; Morris et al., 2005; Pollit, 2006).
In recent years many institutions have undergone several changes mainly derived from the environmental pressures (i.e. market and regulatory forces) which have significantly accentuated the importance of a broader accountability in order to enhance transparency on how effectively and efficiently they manage their resources and produce value for the contexts of reference. In response to these pressures, institutions worldwide are implementing new management and reporting systems and, among them, the social reporting represents a fundamental tool to (potentially) comply both with accountability demand and legitimating needs (Frey, 2009; Ricci and Parnoffi, 2013). Indeed, Bovens (2010) argues that accountability through the social reporting may keep institutions “on the virtuous path and prevent them from going astray” (Bovens, 2010 p. 963). Such reporting may be helpful in assessing the results, supporting the decision-making process, and increasing consensus in the society.
On this basis, and despite the positive judgment for the initiatives undertaken to date, it is widely acknowledged that several doubts still remain in relation to social reports capability to meet the information needs of the stakeholders and to really achieve legitimacy purposes. Indeed, disclosure is still heterogeneous, jeopardized, and in some cases discontinuous, thus leaving room for debate. An interesting debate referred, over the last years, to the issues relating to the search for legitimacy in response to increasing accountability demands.
A number of studies has adopted the perspective of the Legitimacy theory to focus on the role of information and disclosure in the relationship(s) between organisations, the State, individuals and groups (Gray et al., 1996). More specifically, Legitimacy theory has been largely employed to explain the social responsibility disclosure choices, given that a primary aspect of this theoretical approach, – common also to the stake-holder theory and to the Institutional theory – is that disclosure policies are regarded as a mean to constitute a strategy to influence the organization’s relationships with the other parties with which it interacts (Deegan 2009).
Legitimacy theory is mainly grounded on the idea that there is a social contract between the organization and the society in which it operates. Such a contract implies explicit and implicit expectations of the society in relation to organization’s activities and, in turn, fosters organisations to constantly seek to ensure that other parties perceive them as legitimate, i.e. that they are operating within the (constantly evolving) bounds and norms of their societies of reference.
Legitimacy – indented as the generalized perception that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs and definitions (Suchman, 1995) – is a relative concept and is time and place specific. Legitimacy represents a resource for the organization, that if is unable to legitimate itself will be likely to perish (Myer and Rowan, 1977). On this basis organizations try to activate a number of mechanisms and strategies to achieve legitimation, and among them a relevant role is played by disclosure-related strategies (Woodward et al., 1996).
What should be noted is that usually disclosure-related strategies have been employed by companies to regain legitimacy after some legitimacy-threatening events. However, such legitimation strategies are relevant also to gain and maintain legitimacy (Suchman, 1995; O’Donovan, 2002). Public disclosure can be then used by organizations to counter or offset negative news that is publicly available, to provide material to inform interested partied about previously unknown aspects of the business activities, to draw attention on the organization’s strengths, and to down-play information concerning negative implications of the activities (Lindbolm, 1994; Dowling and Pfeffer, 1975). Some studies demonstrate that the extent and content of the disclosure may vary as a consequence of changing society’s accountability expectations (Hogner, 1982; Patten, 1992). Other works maintain that an increase in the amount of “positive” disclo-sure is detectable in the periods following to negative events (Deegan and Rankin, 1996; Deegan et al., 2000). Yet other researches, demonstrated a positive correlation between media/social attention for certain issues, and the amount of disclosure divulged by companies (Deegan et al., 2002; brown and Degan, 1998).
However, it is worth noting that when legitimacy worries trigger the disclosure process, then the information divulged is likely to be motivated by survival or profitability concerns, rather than by a desire to achieve greater accountability. This may dangerously give rise to disclosures that are mere legitimation devices and not accountability mechanism (Gray and Bebbington, 2000). Thus, to understand if disclosure is aimed at reaching mere legitimation rather than at answering accountability demands, a possible way is to ascertain if this is employed as a symbolic or as a substantive technique. Symbolic techniques do not reflect any real change in activities, while substantive techniques involve real material change in organisational goals, structures and processes, or socially institutionalized practices (Ashforth and Gibbs, 1990). These issues are becoming increasingly relevant due to the constantly-growing accountability demands.
In addition to disclosure questions, it is also widely recognized that to achieve truly greater accountability, and to ensure that the aforementioned relationships between actors are actually effective towards a higher quality of the system, it is no longer possible to exclusively rely upon “objective” and ex post measurements/assessments.
In contrast, it is necessary to configure a complete process of change through which you can provide a more complete picture of the problems of the companies, in question and permit to take into account a plurality of dimensions that other approaches do not support. It is necessary to clarify at this stage, that for every type of entity a modern system of management accounting, capable of worthily serve the objectives assigned to it, must necessarily focus on the company’s ability to optimize its resources and intangible assets, to create value by investing in research, innovation, education and relationships with customers, suppliers and employees. Moreover, it should be noted that there is no need to adopt new devices and tools to meet the increasing demand for accountability, rather there is a vital necessity of adapting the existing ones to the distinctive characteristics of the entity and the sector in which the organization come into play.
These issues are particularly relevant especially for what concerns the so-called missing link between accountability, social outcomes, and social impact.