Social and environmental reporting at the VRA: institutionalised legitimacy or legitimation crisis?

Literature on social and environmental disclosure has sought to provide explanations for corporate decisions to disclose information in annual reports. This paper uses a combination of institutional theory and Habermas’ legitimation theory to explain social and environmental reporting at a Ghanaian public sector organisation, the Volta River Authority (VRA). In the case of the VRA a major influence on environmental reporting is the constant pressure to comply with the requirements of funding agencies, such as the World Bank, in order to provide institutional legitimation. The same sources of pressure which encourage the reporting of physical environmental impacts, lead to undesirable outcomes for the local population. Institutionalised practices lead to prices beyond the reach of local people and work against the original developmental goal of the VRA project. Such effects are invisible and remain so in accounting systems designed to meet the requirements of international institutional legitimisation. The result of institutionalised reporting procedures is not legitimacy, but a crisis of legitimation.