*2.1. Anti-Corruption Disclosure Practices*

The UK was one of the first countries to take measures to tackle corruption by passing the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906, and the Prevention of Corruption Act 1916, collectively known as the Prevention of Corruption Acts 1889 to 1916. These were replaced in 2010 by the UK Bribery Act. Many countries and international bodies have addressed the issue more recently, with the Organization for Economic Co-operation and Development's (OECD) Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions in 1999 focusing on the party offering the bribe. In 2003, the United Nations adopted its Compact Against Corruption (UNCAC), encouraging companies to fight corruption. Authors [5] stated that ACD was a vital element in fighting corruption [5].

Within this broader context, we will now give a brief review of recent corruption laws and disclosure requirements in the UK, with a focus on hegemonic perceptions of quality within corporate reporting generally. Defining quality is highly subjective and influenced by political considerations and culture, amongst other factors. Our concern here is to seek to assess quality, or at least factors that might be seen as proxies for quality, within a corporate reporting context. Whilst focused on financial reporting, it is useful to note that the International Accounting Standards Board (IASB) has struggled to be consistent in defining a framework to produce useful or high-quality financial reporting. Authors [5] sets the 2018 conceptual framework, which aims to:

*"* ... *develop Standards that bring transparency, accountability and efficiency to financial markets around the world. The Board's work serves the public interest by fostering trust, growth and long-term financial stability in the global economy. The Conceptual Framework provides the foundation for Standards that: (a) contribute to transparency by enhancing the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions* ... *."* (from SP1.5, page 6)

Ref. [39] points out that the 2018 revision reversed guidance for standard setting that had been highlighted within the previous 2010 framework, with stewardship, prudence, and reliability being either reintroduced or redefined in 2018. Authors [40] point out that the framework is only seeking to address the needs of "a very narrow set of financial market actors" (page 5) and, to be consistent with the extract from the framework above, must make the questionable assumption that such an approach is in the broader "public" interest. Hence, it may be assumed that the IASB would define quality in financial reporting, if not implicitly for all reporting, as focused on the needs of investors as primary stakeholders with others (customers, employees, social activists, etc.) assumed to gain from the focus on financial market actors. By merging with the Sustainability Accounting Standards Board (SASB) in 2022, the IASB has deepened its influence on social and environmental areas of reporting. The purpose and intent of such non-financial reporting are summarized as follows:

*"SASB Standards identify the sustainability information that is financially material, which is to say material to understanding how an organization creates enterprise value. That information—also identified as ESG (environmental, social, and governance) information is designed for users whose primary objective is to improve economic decisions."*

For more details, see SASB Standards and Other ESG Frameworks—SASB.

Whilst this merger was recently compared to the time of our case study, it does shed light on what we might expect to find within corporate reporting. Alongside such standards, countries also have differing corporate governance regimes. The 2018 UK code, the relevant governance regime at the end of the case period, does briefly mention other stakeholders with reference to the Companies Act (2006):

*"The board should understand the views of the company's other key stakeholders and describe in the annual report how their interests and the matters set out in section 172 of the Companies Act 2006 have been considered in board discussions and decision-making."* (Page 5. FRC, 2018)

Section 172 of the Act (From Companies Act 2006 (legislation.gov.uk), accessed on 28 January 2023. Note the Act is frequently revised, so 2006 is a time of reference rather than the last time it was amended) details the responsibility of directors regarding other stakeholders, including but not limited to employees, customers, suppliers, and creditors. Section 414 then details the non-financial disclosures required in a "Strategic Report," and 414CB (from the Companies Act 2006 (legislation.gov.uk) accessed on 28 January 2023) specifically includes "anti-corruption and anti-bribery matters." A report that does not include the elements detailed in 414 may lead to the prosecution of the directors, who might be liable to a fine. The Bribery Act 2010 (see the Bribery Act 2010 (legislation.gov.uk), accessed on 28 January 2023) itself is focused on defining the crime and the penalties (a fine or up to 12 months imprisonment) rather than the reporting.

This regulatory framework is not the only pressure on UK companies, with other non-governmental organizations with high profiles also calling on companies to report regularly and meaningfully on various themes. These include TI, GRI, and the UN through first their Millennial Goals and their successor, the Sustainable Development Goals.

None of the above is as straightforward as it might appear. Good news for one stakeholder might be bad or irrelevant for another; what is relevant for the long term might be seen as irrelevant in the short term if that was an investor's focus, for example. As an example, regulators may perceive excellent clarity about bad bribery incidents as useful and beneficial, but managers and shareholders may find it undesirable, as a lack of awareness might be seen to benefit them. An employee might want to know information that informs them about the integrity, or lack of integrity, of their employer whilst being concerned that such news might have negative commercial consequences and consequential downsizing. Quality is concerned with an item's suitability for its intended purpose, and stakeholders with variable objectives are unlikely to always have the same understanding of how the item can be implemented. This notion is well-known in the literature on accounting reporting [3,33,41–47]. The literature emphasizes the need to focus on the individual dimensions of disclosure quality (e.g., quantity, breadth, depth, and time) to gain a deep

understanding of reporting quality. Therefore, the amount of disclosure (the most common metric in the literature) is not the only quality metric. It has also been noted by a number of scholars that the importance of corporate disclosure has often been inappropriately linked with the quantity disclosed (see, [43,48–50]).
