Abstract:

With growing public awareness of corporations’ roles in society, corporations start to engage more CSR activities and disclosure. However, there are different perspectives on the conduct of CSR reporting (CSRR). Firstly, some believe that companies will gain financial benefit by responding to the various stakeholders’ expectation on CSRR. In contrast, some may see that CSR activities are distraction from the fundamental economic role of businesses. Companies need to seize opportunities and target capabilities that they have built up for competitive advantage to contribute to sustainable development goals. CSRR remain largely as voluntary response and is the extra things a company does beyond its legal obligations even though it has become mandatory requirement in Malaysia. This paper aims to examine the relationship between corporate social reporting, competitive advantage and financial performance based on the perception of public listed companies’ managers through legitimacy theoretical lens. Based on the data collected from semi-structured interviews, the findings show that there is increasing awareness among public listed companies on corporate social reporting. Even though there are relationships between CSR reporting, competitive advantage and financial performance, some of the interviewee believes that the competitive advantage can be only seen and quantified in long term through enhanced reputations and image.