Academic journal article Accounting Historians Journal

Showing a Strong Front: Corporate Social Reporting and the 'Business Case' in Britain, 1914-1919

Academic journal article Accounting Historians Journal

Showing a Strong Front: Corporate Social Reporting and the 'Business Case' in Britain, 1914-1919

Article excerpt

Abstract: It is generally asserted that corporate social reporting (CSR) is a phenomenon of the late 20th century. The present paper contests this view by looking at the ways in which British companies reacted to the challenges they faced during the First World War, when they were exposed to charges of profiteering, as well as to industrial unrest and high taxation. The paper considers the use of the speeches made by chairmen at annual general meetings to refute these charges and defend themselves. It considers the relevance of these findings for contemporary social reporting, and suggests that investigation of the history of CSR is likely to show further examples of its use by companies to put forward "the business case".


A wide array of modes of corporate reporting is currently deployed by large companies worldwide in a variety of media--in newspapers, and magazines, in dedicated reports, on the Web, on video. They run the spectrum from heavily regulated disclosures in the form of audited financial statements to what has been described as "advocacy advertising" (1) [Sethi, 1977; Milne, 2002; Milne and Patten, 2002]. Somewhere in between fall a variety of reports on corporate social responsibility, environmental performance, contribution to employee well-being and so on, containing varying proportions of quantified, audited statements, narrative, diagrams and pictures. Like the financial reports, they are addressed to shareholders and to the public and intended to convey information about the company's performance and prospects, but, unlike the financial reports, they are voluntary and their content is not regulated.

The present paper examines an episode in the history of corporate reporting--the extent and nature of the voluntary disclosures made by limited companies in Great Britain during the First World War and the beginning of readjustment immediately after the war. They are, it is suggested here, of some interest for what they have to say about the relationship between limited companies, their shareholders and society at large in that period, and also about the role then and now of corporate social reporting. The evidence offered here is potentially part of a continuing history of corporate reporting, and one of the intentions of the paper is to encourage further research to track the extent to which companies--in Britain and elsewhere--made disclosures of this kind both prior to and after the episode outlined here.

The paper begins by outlining the role of the annual general meeting (AGM) in the period under review, and the issues which were of particular importance to limited companies during the First World War. It goes on to review the treatment of these issues in the speeches made by company chairmen and senior directors at wartime AGMs, and considers the relationship between this form of communication and the role and content of what is now known as corporate social reporting.


Britain in the mid-19th century has been described by Cottrell [1980, p. 41] as having "the most permissive commercial law in Europe", and the Companies Acts of 1900 and 1907 did little to impose restrictions. The amount of accounting disclosure required in the early 20th century was minimal. Companies had to produce an audited balance sheet, but the publication of a profit and loss account (which did not have to be audited) was not a requirement until the Companies Act of 1929, so the figures for sales and operating profit need not have been, and generally were not, disclosed. To make the year's position even more opaque, companies had discretion over the amount of depreciation they charged, which tended to vary in response to the amount of profit they wanted to abate rather than the wear and tear on assets, and they could also hide substantial amounts of profit in provisions, e.g. for taxation, which melted into an undifferentiated figure for current liabilities on the balance sheet. …

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