Discretionary compliance with mandatory environmental disclosures: Evidence from SEC filings

Corporate social responsibility research in accounting

“…Also, as Moser and Martin (2012) point out, some CSR activities come at the expense of shareholders, at least in the short run. Along these lines, Peters and Romi (2013) present evidence that compliance with mandatory environmental disclosure rules depends on firms' reporting incentives. Who benefits and who incurs a cost if firms fail to report negative CSR issues?…”

Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act

“…These results are consistent with previous studies documenting strategic (non‐)compliance in mandatory disclosure regimes with constrained or lenient enforcement policies (e.g. Peters and Romi, ). We extend these studies by considering underlying firm‐level characteristics associated with CMD levels.…”

“…In the conflict minerals setting, which has been subject to high public scrutiny since the passage of the Dodd–Frank Act, we argue that a firm's compensation system probably influences managers’ decisions to potentially withhold proprietary information and ultimately affects a firm's compliance with external reporting requirements (Peters and Romi, ). Compensation systems that include long‐term incentives deter managers from poor social and environmental practices and lead them towards increased levels of corporate reporting as ‘quality disclosers’ (Deckop et al ., ).…”

“…CMD offers a suitable setting to draw upon disclosure theory and examine the internal factors that enable managers’ discretion in external reporting decisions for emergent forms of mandatory (non‐)financial information with prevailing enforcement leniency (e.g. Ettredge et al ., ; Peters and Romi, ). Our findings also relate to the long‐standing concerns of policy‐makers and securities regulators regarding the effectiveness of mandatory norms designed to enhance due diligence practices via disclosure requirements (Prakash and Rappaport, ; Heitzman et al ., ; Christensen et al ., ).…”

Determinants of monetary penalties for environmental violations

“…Knowledge of the corporate environmental penalties associated with disclosure practices, managerial incentives and CSR‐oriented investments is important for the development of additional regulation that might promote a CSR‐friendly business environment. While most of the regulations relating to environmental compliances are voluntary in practice, Peters and Romi () find that simply creating additional reporting requirements will not necessarily lead to real change in regulatory enforcement. Regulators might suggest that firms initiate multiple approaches, including higher levels of disclosure, a low‐emission strategy and more investment in environmental disclosure activities to improve environmental compliance.…”