VENDILLO, Narcy Lyn T.

MS Accountancy

Corporate Social Responsibility (CSR) in not new to the ears of Business majors and to the eyes of people. We have heard it
from our Ethics subjects in the undergrad or have seen a couple of school buildings adorned with the SM logo. But the theories
concerning the what, why, and how of CSR are a quite unfamiliar. To be honest, it was only during my first semester in this program that
I’ve learned about Legitimacy Theory and Stakeholder Theory in relation with Sustainability Reporting. Legitimacy theory points out
that Sustainability Reporting is a corporate communication mechanism to influence stakeholders’ image of the company; while the st-
akeholder theory is focused on the accountability of organizations.

The given journal selected social and political theories namely legitimacy, stakeholder, and institutional theories over economic
theories to explain CSR practices of companies. Fernando argues that the aforementioned social and political theories have more ability
to provide insightful perspectives on CSR practices rather than economic theories do. I agree with his contention because the three
enumerated theories touch the psychological side of CSR practices. First is the legitimacy theory suggesting that for organizations to
continue existence, they must meet the expectations of the society. This makes me think that companies do CSR activities not because of
their golden hearts for charity but in order to legitimize their operations. CSR therefore is not a mechanism that aims to benefit the
society but to create a good reputation for the organization. Second is the stakeholder theory that highlights the organizational
accountability beyond simple economic or financial performance. Unlike CSR in relation to legitimacy theory which I construed as
something done by companies to justify their existence, in stakeholder theory the conduct of CSR activities are considered as an
obligation of the organization towards its stakeholders. However, on my perspective in stakeholder theory, the organization answering to
its stakeholders is also a part of legitimization activities. The journal puts emphasis that in the managerial perspective of the stakeholder
theory, an organization is expected to be more answerable to the economically powerful stakeholders rather than all stakeholders.
Therefore most companies are giving more importance to demands of financially powerful stakeholders, the investors, critical suppliers,
among others setting aside the clamor of the minority. Favoring the powerful at times lead to companies’ unethical actions further
affecting their legitimacy if uncovered. The third theory tackled was the institutional theory which embraces the need for organizations to
conform to social norms and practices to enhance their legitimacy. Therefore, organizations are being pressured to conform to what other
organizations are applying or using in order to not lose their legitimacy or lose the competitive edge. Since most companies are
voluntarily engaging in CSR activities or disclosure, other organizations have no choice but to also do it, unless suffer the consequences.
These consequences may come in profit loss or activism from disvalued stakeholders among others.

On the process of going over the journal, I realized that these theories are also applicable to accountants in their practice. In
relation to legitimacy theory for example, accountants need to maintain an image of integrity, competence and professionalism. I order to
legitimize our image we exert effort from practicing honesty at work and stringency in applying the standards, to attending various
trainings so we can improve our level of competence. Meanwhile, with stakeholder theory we are accountable not only to the
organization where we work or its stakeholders, we are answerable to the public who expect us to do our jobs correctly and honestly in
accordance with the standards. We are answerable to almost everyone because they rely to the reports we produce, the analysis we give.
With the institutional theory, I realized that accountants face all these nerve-wracking pressures to stay afloat. We are pressured by the
practice to gain 120 Continuing Professional Development (CPD) units within three years; pressured by the overseeing regulatory bodies
to follow the generally accepted accounting principles as well as the tax laws not mentioning the reporting required by the management;
pressured by fellow accountants who have already furthered their studies; pressured by our families because of our measly income; and a
lot more pressures that we needed to comply. We have no choice to comply unless we lose our license, be reprimanded, or be left behind.

Given a deeper meaning about the three theories, I appreciate more the accounting practice. That despite all of the difficulties
and pressures, we are remaining sane and “okay” whatever that means. We are tough. Accountants are tough kinds of people. However,
despite the invested time responding to all these expectations and pressures we must also learn to give time for ourselves. Spend time
with family or hang out with friends. Amidst all the pressure, take that coffee break, book that flight, attend that concert, binge-watch that
series. Yes, it is more than important to harness oneself for the profession but leaving the other facets of life unattended is another story.
Accounting is our profession, not our entire life.