1 Dialogic Accounting and Involuntary Disclosures: Investigating Stakeholder-Company Communication on Social Media

Home , Stakeholder (corporate)

DIALOGIC ACCOUNTING AND INVOLUNTARY DISCLOSURES: INVESTIGATING STAKEHOLDER-COMPANY COMMUNICATION ON SOCIAL MEDIA

Dorota Dobija* Kozminski University ORCID: 0000-0003-2957-6882 [email protected]

Charles H. Cho Schulich School of Business York University ORCID: 0000-0003-1890-2662 [email protected]

Chaoyuan She University of Essex ORCID: 0000-0002-2187-7480 [email protected]

Ewelina Zarzycka University of Lodz ORCID: 0000-0002-5347-2883 [email protected]

Joanna Krasodomska Cracow University of Economics ORCID: 0000-0001-8423-678X [email protected]

Dariusz Jemielniak Kozminski University ORCID: 0000-0002-3745-7931 [email protected]

* Corresponding author

Please do not quote, cite, distribute or copy without the consent of the authors.

December 2020

1 DIALOGIC ACCOUNTING AND INVOLUNTARY DISCLOSURES: INVESTIGATING STAKEHOLDER-COMPANY COMMUNICATION ON SOCIAL MEDIA

ABSTRACT

Purpose: This paper explores, with the use of the dialogic accounting concept, the rhetorical strategies companies use to manage involuntary disclosures on Twitter. We focus on stakeholder initiated or sustained dialogue and the reactions of companies to external tweets.

Design/methodology/approach: We analyze over 142,910 tweets from 6 different companies. We identify 4412 replies to CSR involuntary disclosures and we code them according to a number of rhetorical strategies. Next, we analyze the reaction of stakeholders to the corporate tweets and to different rhetorical strategies used by companies.

Findings: Our findings indicate that different rhetoric strategies are used by companies when replying to involuntary disclosures. Stakeholders continue dialoguing with the firm after seeing a reply to an involuntary disclosure. Denial and evasion of responsibility resonates with stakeholders and encourage them to continues the dialogue. However, the dialogue with the stakeholders require appropriate content of the message as well as careful use of specific ‘attractors’ in the message such as hashtags or user mentions, which draw the attention of the users.

Research limitations/implications: The study limitations include the pre-selected sample and focus on Twitter only.

Originality/Value: The study provides new insights into how companies manage involuntary disclosures on SM. We document the development of dialogic accounting on SM and, in particular, provides new insights into the possible responses of companies to involuntary disclosures made by companies' stakeholders or stakeseekers.

Keywords: involuntary disclosures, Twitter, sustainability, stakeholder engagement

2 DIALOGIC ACCOUNTING AND INVOLUNTARY DISCLOSURES: INVESTIGATING STAKEHOLDER-COMPANY COMMUNICATION ON SOCIAL MEDIA

1. Introduction

Freeman (2017) suggested that stakeholder engagement in a company may lead to more collaboration and support of corporate activities. In order to gain benefits from these processes, companies not only need to identify stakeholders but also manage their relationships with them (Campra et al., 2020; Stocker et al., 2020). The companies can approach stakeholder engagement in four different ways: communication, dialogue, consultation, and partnership (Greenwood, 2007). In the last few years, the literature on the various initiatives of stakeholder engagement has been growing (Garcés-Ayerbe et al., 2019;

Herremans et al., 2016; Manning et al., 2018; Stocker et al., 2020).

One particular aspect of stakeholder engagement relates to accounting information.

The recent papers investigate this issue in relation to both corporate financial reports and corporate social responsibility (CSR)/non-financial reporting (Belluci et al., 2019; Williams and Adams, 2013). These studies explore the emerging concept of dialogic accounting understood as a form of accounting that creates the space and the opportunities for more engaging communication and dialogue. Dialogic accounting, or in other words, polygonic accounting (Dillard and Roslender, 2011), may play an important role in enhancing a two- way dialogue between a company and its shareholders. Moreover, it can also be an attractive way for stakeseekers to engage with a company. For that reason, the instrumental rationality

(Dillard and Ruchala, 2005), which could be observed in case of more traditional ways of corporate communication, transforms into more pluralistic communication among stakeholders and a company. In dialogic accounting, stakeholders, but also stakeseekers, are encouraged to express their own expectations towards a company (Belluci et al., 2019).

3 In dialogic accounting, stakeholders and stakeseekers are not only encouraged to react to corporate communication but also may independently disclose information about a company. Dumay and Guthrie (2017) define this type of information as involuntary disclosure. Involuntary information is revealed against the will of managers. Involuntary disclosure could be, for instance, used to highlight some facts related to social or environmental activities of the company. Stakeholders and stakeseekers may be willing to disclose this information because they have limited abilities to influence the company in a more direct way. An example of involuntary disclosure is revealing by journalists that a brand promoted as local and eco, in fact, produces its products in Asian factories. Involuntary disclosure produced by stakeholders and stakeseekers brings opportunities as well as threats to companies. In particular, involuntary information may carry the risk that could influence not only reputation but also share value.

The development of dialogic accounting may be further enhanced and supported by the development of social media (SM) communication. Research on SM has been significantly increasing in the area of marketing and management ( Bacarella, et al., 2018;

Okazaki, et al., 2019). Still, in the area of accounting, the research on how SM is used for the reporting purposes is limited. SM seems to be a convenient tool for both companies and stakeholders. Companies may be interested in fast and convenient communication with stakeholders. By engaging on SM, stakeholders gain a tool for engagement with a company they have or seek a stake. They may express their opinions on company's actions and the accounts the company provided to the public. A stream of research on the use of SM for corporate financial and nonfinancial communication is already emerging. Biliński (2019) investigates specifically shareholders' reactions to earnings announcements and concludes that

SM communication plays an important signaling role in corporate financial reporting communication. In the context of CSR Manetti and Belucci (2016) document shareholder

4 engagement in sustainability reporting and conclude that only a small number of companies use SM to define the content of SESR and the company – stakeholder interaction is rather limited. Belucci and Manetti (2017) also investigate the use of SM in interactions with its stakeholders in a case of NGOs, also concluding limited use of SM by foundations in their interactions with stakeholder groups. In general, the prior studies investigate for SM are utilized in company-stakeholders communication.

Therefore, the purpose of our paper is to investigate, with the use of the dialogic accounting concept, the rhetorical strategies companies use to manage involuntary disclosures on Twitter. This paper, therefore, attempts to provide some insights on:

(1) whether or not companies engage in the stakeholder initiated/sustained dialogue in relation to CSR disclosures?

(2) what type of communication (rhetorical) strategies (such as denial, evasion of responsibility, reducing offensiveness of event, corrective actions, mortification) help companies to sustain dialoguing with stakeholders?

(3) whether or not stakeholders respond to these tweets and continue dialoguing.

The paper utilizes a set of data related to tweets of 6 companies (Dell, H&M, Intel,

Nestle, Danone, HP, GE). All selected companies engage themselves in corporate communication on Twitter as well as are well known for the CSR programs. We analyze the reactions of stakeholders on strategies employed by companies to address involuntary disclosures in the area of CSR. The findings show that stakeholders continue dialoguing with the firm after seeing a reply to an involuntary disclosure, but not all strategies used by the company are appreciated by them, achieve greater public resonance or are commented. Thus, the dialogue with the stakeholders require appropriate content of the message as well as careful use of specific ‘attractors’ in the message such as hashtags, user mentions, hyperlinks to draw the attention of the users.

The paper intends to contribute to the existing literature in three distinct ways. Firstly, it provides some additional insights into dialogic accounting. So far, most studies investigated

5 disclosures initiated by the company as a part of a corporate communication process.

However, engaged stakeholders and stakeseekers can also initiate a dialogue with a company.

They also may respond to company messages, thus sustaining the dialog. This paper analyzes the company's reaction to stakeholder and stakeseeker initiated/sustained dialogue and investigates how companies manage this type of dialog.

Secondly, investigating the stakeholders' and stakeseekers' initiated/sustained dialogue allows us to provide insight into what type of rhetorical strategies companies apply when reacting to involuntary disclosure. This paper is, therefore, a direct response to the call for research on how organisations manage risks associated with involuntary disclosures (Dumay and Guthrie, 2017).

Thirdly, this paper also is intended to contribute to the emerging stream of literature on the use of SM for the purpose of corporate reporting in particular in relation to nonfinancial disclosures on Twitter.

The remainder of the paper is structured as follows. In section 2 we present the literature review and discuss our research framework. Section 3 discusses the method of conducting our research. Section 4 presents our sample, descriptive statistics and discusses the results. Section 5 offers a discussion and concluding remarks.

2. Literature review

2.1. Stakeholder engagement and involuntary nonfinancial disclosures

The Institute of Social and Ethical Accountability (ISEA, 1999) defines stakeholder engagement as “the process of seeking stakeholders' views on their relationship with an organization in a way that may realistically be expected to elicit them” (p. 91). The major motivation for corporate nonfinancial practice and disclosures is to enhance corporate image and credibility with stakeholders. A firm's relationship with stakeholders goes beyond the

6 one-way dissemination of information on corporate activities, and includes a level of stakeholder engagement and participation in the firm's decision-making process (Crane and

Livesey, 2003). As a result, the company starts interacting with stakeholders to exchange information, discuss opinions and expectations, and influence each other (Arenas et al., 2009).

As Holzer (2008) points out, in addition to a set of well-known generic or primary stakeholders (investors, employees, governments, suppliers, consumers, etc.), companies face a complex arena of newly emerging 'stakeseekers.' They are more challenging to define and recognize and usually treated as secondary stakeholders who do not directly affect the firm's operations. However, when organizing in groups, such as protest groups, NGOs, and social movement activists, stakeseekers striving for a voice in the corporation's decision-making may be a source of costly conflicts. They might be especially interested in uncovering information held privately by companies on nonfinancial issues (e.g., social injustice, environmental degradation, or workplace harassment). Therefore, companies spend time and money on active engagement with stake seekers (Holzer, 2008).

As stakeholders (including stakeseekers) demand more information about the companies' nonfinancial operations, firms need to become more proactive and transparent in non–financial disclosure (Rodrigue et al., 2013). The crucial importance of stakeholder engagement for adequate corporate non-financial disclosures is stressed by regulators (such as e.g., European Union, 2017, 2019) or standard setters (GRI, 2018). To better respond to the stakeholders' information needs, companies have to engage themselves in dialogue with them, instead of practicing one-way communication. The dialogical approach has to be undertaken in the case of voluntary, and - to the extent possible under particular law requirements – also mandatory nonfinancial disclosures. However, apart from these two types of nonfinancial information, also involuntary disclosure can be distinguished. Involuntary disclosure also

7 engages stakeholders and takes the form of two-way communication; however, the process works in a slightly different way.

Before being introduced to the intellectual capital literature by Dumay and Guthrie

(2017), the concept 'involuntary disclosure' was mainly used in the context of revealing a severe illness, like HIV, or sexual orientation. With involuntary disclosure, a family member, medical staff, or other person is intentionally or unintentionally informed about the other person's condition, breaching this way the confidentiality of the issue (Cohen et al., 2017).

The second context in which 'involuntary disclosure' appears is the situation in which an organization collects information without the informed consent of the individual (Wilson et al., 2015).

In this paper, we use the concept proposed by Dumay and Gurtie (2017, p. 30), according to which involuntary disclosure is “what stakeholders and stake seekers disclose about an organization” (p. 30). This disclosure is initiated not by the organization itself, but by a third party, and disclosed against the will of managers. It is not subjected to any regulations or guidelines or requested. The reliability of such information may be questionable since it might well be based on rumors or insinuations and misinterpreted as being truthful. Rumors, however, such as any other pieces of information disclosed, can be negative or positive. Therefore, involuntary disclosures pose opportunities and threats to companies, bringing new risks that impact their reputations, and need to be effectively managed (Dumay and Guthrie, 2017). Organizations can undertake various strategies to manage information produced by stakeholders (including stake seekers) outside their boundaries and control, but each of them involves using communication processes.

There are a variety of communication channels through which information about a company's nonfinancial activities can be disseminated. A company itself can communicate these practices through ofﬁcial documents, such as an annual report, corporate social

8 responsibility (CSR) report or press releases, and dedicate a section of its ofﬁcial corporate website to nonfinancial issues. It can also use SM, such as social networks, blogs, websites, and other technologies linked to the internet. Due to the fact that SM are not entirely controlled by the company, they are a perfect tool to provide involuntary disclosures by stakeholders (Manetti and Belucci, 2016; Belucci and Manetti, 2017).

2.2. The use of social media in stakeholder-company nonfinancial communication

Corporate websites are considered an effective channel to provide stakeholders with nonfinancial information. However, new internet-based channels of communication, such as

SM have the potential to change the process of stakeholder dialogue. SM make it possible for the stakeholders to 'initiate and discuss any issue of their interest and engage in dialogue about and with the company, in a media characterized by almost immediate and worldwide diffusion' (Gomez-Carrasco and Michelon, 2017). The development of new communication technologies has a profound impact on how organizations disclose information and communicate with stakeholders (Dumay, 2016).

SM can be defined as 'a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content' (Kaplan and Haenlein, 2010, p. 61, as cited by Belluci and Manetti, 2017, p. 874). This term describes different types of applications, ranging from collaborative projects such as Wikipedia to social networking sites such as Facebook. The increase in their use leads to the production of more information, quicker diffusion of that information and new ways to access, evaluate and use that information (Dumay and Guthrie,

2017). As Belucci and Manetti (2017) argue, SM are particularly well-suited for stakeholder engagement, as they are capable of interacting with a large group of people, especially external stakeholders possible. SM can help organizations engage stakeholders because it allows one party (the organization) to interact with another (the stakeholder or stakeseeker) in

9 a dialogue in which both parties learn from these interactions, thereby deeply revising their expectations and preconceptions.

The use of SM in corporate-stakeholders communication has been investigated in the previous literature from various perspectives. Lardo et al. (2017) focused on Facebook,

Twitter, Google Plus and Instagram to investigate the relationship between popularity in a SM network and a company's revenue, expenditure and market value. Ramírez and Tejada (2019) analyzed the extent and quality of intellectual capital disclosures on Twitter, Facebook,

LinkedIn, and Instagram. A study by Manetti and Belucci (2016) shows that Twitter,

Facebook, and YouTube are rarely used to engage stakeholders and to define the contents of nonfinancial disclosures. LinkedIn disclosures and factors that influence them were analyzed by Pisano et al. (2017). Facebook as a dialogic accounting tool and its use by large NGOs, was investigated by Bellucci and Manetti (2017). Finally, a study by Gomez-Carrasco and

Michelon (2017) provided evidence that Twitter activism of key stakeholders has a significant impact on investors' decisions. In this paper, we plan to focus on the corporate- stakeholders/stakeseekers communication on Twitter.

The emergence of SM influences both the voluntary and involuntary corporate disclosure (Lardo et al., 2017). SM enables companies and stakeholders to create, share or exchange information, ideas and images in large volumes and high velocity (Dumay, 2009).

This virtual environment has a profound impact on (dialogical) stakeholder-company communication (Dumay, 2016).

10 2.3. Theoretical framework

We build on the concepts of dialogic accounting and involuntary disclosures explained in the introduction for framing our research in the context of SM. Our research framework is presented in figure 1. In dialogic accounting, stakeholders or stakeseekers may send an initial signal or sustain dialogue with the company (1). The company may choose to ignore the received signal, or it may send a countersignal to the stakeholders and stakeseekers (2).

Stakeholders and stakeseekers may also decide to discontinue the dialogue or to engage in the additional dialogue (3).

Since the stakeholders and stakeseekers initiated/sustained dialogue may provide opportunities but also threats for a company in terms of reputation but also in terms of share value, it is possible that the company may want to respond to this type of communication from stakeholders/stakeseekers.

The responses of the company to stakeholder/stakeseeker initiated/sustained dialogue may be different. Shrives and Brennan (2017) develops a typology of responses for reputation risk management. This typology was extended and used by Ardiana (2019) in the investigation of how Australian companies manage risks related with stakeholder engagement in sustainability reporting. Possible responses may include: (a) denial, (b) evasion of responsibility, (c) reducing offensiveness of event, (d) corrective actions, (e) mortification.

Table 1 presents a description of each rhetorical strategy company may use in response to stakeholder/stakeseeker initiated/sustained dialog.

Insert table 1 about here

11 Figure 1 presents our research framework. The main point of interest in this study is the countersignal (2) which companies send in response to original involuntary disclosure (1).

This paper investigates both the language as well as rhetorical strategies companies use in response to involuntary disclosures made by stakeholders and the responses and the reactions of stakeholders to this communication.

Insert figure 1 about here

We propose the following research questions:

RQ1a: Do companies engage in stakeholder initiated/sustained dialog?

RQ1b: Do companies engage in stakeholder initiated/sustained dialogue if involuntary disclosure is made?

RQ2: When firms respond to involuntary disclosure, what type of rhetorical strategies do they use?

RQ3: When firms respond to involuntary disclosures, what type of language (positive, negative, neutral) do they use?

RQ4: Do stakeholders continue dialoguing with companies? (reactions of stakeholders/stakeseekers to companies’ responses).

3. Research method

3.1. Data collection and sample

In the proposed study, we use tweets of 6 selected companies (Dell, H&M, Intel,

Nestle, Danone, HP). All the selected companies are among the most active on Twitter in their industry and renowned for their CSR programs, according to leading industry reports

(e.g., Salterbaxter, 2019). A total number of 142,910, tweets were extracted from twitter using a scraping algorithm. They are from the period 2007-2020. Our sample tweets are either from the brands' corporate handles, news handles, or are tweets that mention or directly reply to

12 these tweets. The non-English tweets were excluded from the sample, resulting in the total number of 142,268 tweets.

3.2. Empirical model and variables measurement

Descriptive statistics will allow us to investigate whether companies engage in stakeholder initiated/sustained dialogue in general and when the involuntary disclosure is made (RQ1a and RQ1b). Additionally, descriptive statistics will help answer RQ2 and RQ3.

To investigate whether stakeholders would continue dialoguing with the firm after seeing a reply to an involuntary disclosure (RQ4), we focus on all firm replies made to stakeholder-initiated tweets. Following prior studies (Saxton et al., 2019), we employ the following Logit model to examine the likelihood of stakeholders respond to a firm reply to an involuntary disclosure:

STAKREAij = α1 + β1INVFIRMREPLYij + β2FIRMSENTij + β3READij + β4FIRMURLij + β5FIRMMENTIONij + β6FIRMHASHij + FIRMFE + YEARFE + ε (1) Where it denotes message i posted by firm j.

STAKREA is the likelihood of a stakeholder react on a firm reply. We use three alternative reactions to capture stakeholder response: favourite (FAV), retweet (RT) and comment (REP). Each of the three measures is a dummy variable equal one if there is at least one stakeholder reacted to a firm reply using the relevant response and zero otherwise.

INVFIRMREPLY is a dummy variable equal one if a firm replied to an involuntary disclosure and zero otherwise. This variable is manually coded by two coders simultaneously. All coding discrepancies between coders are reconciled and discussed at a meeting of the research team to ensure the consistency and reliability. We include several variables to control for other message characteristics. Following prior studies, we include the sentiment of the firm reply

(FIRMSENT) as prior studies show that firms may strategically frame CSR information in a positive tone to manage stakeholder perceptions (Bozzolan et al., 2015; Cho et al., 2010). The sentiment score is calculated using VADER sentiment dictionary as it is more suitable for a

13 social media context (Gilbert & Hutto, 2014; She & Michelon, 2019). We control for the readability of a text (READ) using Flesch-Kincaid score as prior studies find that firms may reduce the readability of a text to hide poor CSR performance (Muslu et al., 2019). We also control for the presence of hyperlinks (FIRMURL), mentioning of any Twitter account

(FIRMMENTION) and hashtags (FIRMHASH) as these social media message features will affect stakeholder responses (Saxton et al., 2019; Saxton & Waters, 2014; She & Michelon,

2019). We include firm fixed effect to control for unobservable time-invariant firm characteristics and year fixed effect to control for any unobservable event during the sample period.

To further explore the impact of rhetorical strategies used in firm replies on stakeholder reactions, we focus on a subsample of tweets which only consists of firm replies to involuntary disclosures. We identified a total of 4,412 firm replies to an involuntary disclosure. We employ the following Logit model to examine the likelihood of stakeholders to continue dialoguing with the firm after seeing the rhetorical strategies:

STAKREAij = α1 + β1RS1ij + β2RS2ij + β3RS3ij + β4RS4ij + β5RS5ij + β6FIRMSENTij + β7READij + β8FIRMURLij + β9FIRMMENTIONij + β10FIRMHASHij + FIRMFE + YEARFE + ε (2)

Where it denotes message i posted by firm j.

In Model 2, RS1 – 5 indicates the type of rhetorical strategies used in a firm reply.

RS1 is a dummy variable equal one if the firm employed a strategy denial in the reply and zero otherwise. RS2 is a dummy variable equal one if the firm employed a strategy of evasion of responsibility and zero otherwise RS3 is a dummy variable equal one if the firm employed a strategy of reducing offensiveness of event and zero otherwise. RS4 is a dummy variable equal one if the firm employed a strategy of corrective actions and zero otherwise.RS5 is a dummy variable equal one if the firm employed a strategy of mortification and zero otherwise. The use of rhetorical strategies in a firm reply is not mutually exclusive. In other

14 words, a firm may not employ any strategy at all or it may employ more than one strategy in a response to an involuntary disclosure. The type of strategies used is manually coded by two coders, similarly as in case of INVFIRMREPLY variable. All other variables are identical to

Model 1 and are defined in table 2.

Insert table 2 about here

4. Findings

4.1. Descriptive statistics and correlation analysis

Tables 3,4 and 5 present the descriptive statistics and provide answers to our RQ1 – RQ3.

Out of 142,268 extracted tweets in English, 82,136 represents the firm reply to stakeholders` tweets, while more than 5% are firm replies to involuntary disclosures (table 3). This percentage varies significantly between companies, as in case of Nestle about 76% of all replies are those related to involuntary disclosures, whereas for HP they represent mere 0,04

% of all replies. Table 3 presents the total number of firm replies to stakeholders’ tweets and the number of firm replies to involuntary disclosures made by stakeholders/stakeseekers.

Insert table 3 about here

The most frequently used rhetorical strategy is mortification, but companies use also denial to reply to the involuntary disclosures. Table 4 presents the number of firm replies employing rhetorical strategies. It is worth noting that one firm reply can be coded with more than one strategy.

Insert table 4 about here

Table 5 presents the descriptive statistics for variables used in analyzing stakeholder reactions on firm replies to involuntary disclosures. Panel A presents the descriptive statistics when using the full sample of firm replies to stakeholder tweets. Panel B presents the descriptive statistics when focusing on firm replies to involuntary disclosures.

Interestingly, the replies to the involuntary disclosures achieve greater public resonance and more engage stakeholders into the dialogue with the companies than general firm replies. It is clearly visible in the higher percentage of reactions with retweet (18%), comment (37%) and favorite (30%) for the replies to involuntary disclosures than for all firm replies (respectively 12%, 25% and 24%). As it was already mentioned more than 5% of all firm replies are replies to involuntary disclosures.

The mean values of Flesch-Kindcais readability index equal 6.26 for all replies and

9.38 for replies to involuntary disclosures informing that the texts of replies are difficult to understand. As regards the sentiment of tweets, we can describe it on average as neutral (0.4 for all replies and 0,32 for replies to involuntary disclosures). However, the SV index for the tweet with the most negative sentiment equals -0.92, while the same index for the tweet with the most positive sentiment equals 0.98 (and 0.95 for replies to involuntary disclosures).

29% of replies contain a hyperlink which can take users to an external web page.

Interestingly, such hyperlink is included in 57% of replies to involuntary disclosures, which means that companies want to provide stakeholder with additional information to make them more informed or convince them to theiractivities. We also see that only 11% of the tweets contain some hashtag. User-targeted tweets represent 47% of all the tweets, while only 28% of tweets replying to involuntary disclosures.

Insert table 5 about here

The correlation statistics for variables used in analyzing stakeholder reactions on firm replies to involuntary disclosures are presented in table 6. Panel A presents the correlation statistics when using the full sample of firm replies to stakeholder tweets. Panel B presents the correlation statistics when focusing on firm replies to involuntary disclosures.

Insert table 6 about here

4.2. The analysis of the reaction of stakeholders/stakeseekers to company’s responses (RQ4)

Table 7 presents the Logit regression results of stakeholder reactions on firm replies to involuntary disclosures. Column 1 presents stakeholder reaction with favourite. Column 2 presents stakeholder reaction with retweet. Column 3 presents stakeholder reaction with comment. INVFIRMREPLY is a dummy variable equals one if a firm reply to an involuntary disclosure made by a stakeholder or stakeseeker earlier and zero otherwise.

Insert table 7 about here

Firm replies to involuntary disclosures (INVFIRMREPLY) are significantly and positively related to the stakeholder reaction with the retweet button and comment. However, for reaction with favorite, INVFIRMREPLY is negative and significant. These results suggest that stakeholders engage in dialogue with the companies on involuntary disclosures and they are willing to comment them as well as continue the dialogue but they do not show approval

17 about what firms do or are critical towards them. The tweets with positive sentiment

(FIRMSENT) receive more favorites and retweets, while those with negative sentiment are willingly commented. This is in line with the findings suggesting that negative messages receive more attention from users (Coleman and Wu, 2010; Ferrara and Yang, 2015; Saxton et al., 2020). For stakeholder reaction with favorite Flesch-Kindcais index (READ) is negative. These findings confirm earlier conclusions that a longer and more complicated text is better perceived by users than a shorter and more understandable one (Chaiken and Eagly,

1989; She & Michelon, 2018). On the other hand, the consistent and positive effect of READ on REP and RT may suggest that stakeholder prefer to retweet and reply to less complicated tweets. Inclusions of URL (FIRMURL) negatively affects all dependent variables, which confirms that stakeholder are not interested in additional information provided by the hyperlinks. Similarly, the use of user mention convention in the replies (FIRMMENTION) is not appreciated by the Twitter users, but it increases the likelihood of retweeting and commenting by the stakeholder. Finally, tweets with hashtag (FIRMHASH) are more likely to attract positive reaction from stakeholders as well be retweeted but are less likely to receive comment.

Table 8 presents the Logit regression results of stakeholder reactions on rhetorical strategies used in firm replies to involuntary disclosures. Specification 1 presents stakeholder reaction with favourite button. Specification 2 presents stakeholder reaction with retweet.

Specification 2 presents stakeholder reaction with comment.

Insert table 8 about here

In specification 1, RS3 is significantly and negatively related to tweets with favorite button. These suggest that stakeholders are less impressed by reducing offensiveness of event

18 used in firms reply to involuntary disclosures. In contrast, specification 2 shows that the disclosure strategies RS1 and RS2 are positively associated with the stakeholders retweets, and the use of denial and evasion of responsibility disclosure strategies is more likely to result in a retweet of reply. Finally, the likelihood of receiving a comment to the reply (specification

3) is positively associated with RS1, indicating that stakeholders engage in discussions on denial disclosed by firms. Interestingly, the tweets with negative sentiment (FIRMSENT) receive more favorites (specification 1). For stakeholder reaction with favorite and retweet

Flesch-Kindcais index (READ) is positive (specifications 1 and 2), while negative effect of

READ on REP (specification 3) may suggest that stakeholder prefer to reply to less complicated tweets. Only for commented tweets (specification 3), FIRMURL is negative and statistically significant. Firm replies mentioning an account (FIRMMENTION) are appreciated by the Twitter users, and increase the likelihood of retweeting and commenting by the stakeholder (specification 1,2 and 3). Furthermore, firm replies to involuntary disclosures with hashtag (FIRMHASH) are more likely to attract positive reaction from stakeholders as well be retweeted (specification 1 and 2), but are less likely to receive comment (specification 3).

5. Discussion and Conclusion

Traditionally, the primary source of information about corporate performance were financial statements and other information published in annual reports. With the expanse of the expectations towards companies to the non-financial areas, their reporting changed and voluntary sustainability, social and environmental or CSR reports became popular. Over time, the companies’ stakeholders began to be more and more engaged in corporate reporting practices and the internet became the important companies – stakeholder communication tool and the way to disseminate non-financial information. More recently, SM has emerged as a

19 new communication wave, offering rapid and open dialogue with stakeholders (Lodhia and

Stone, 2017; Lodhia et al., 2020). Without a doubt, SM is an important and powerful tool that enables stakeholder-corporate two-way communication. However, SM use also poses significant challenges and has to be effectively managed, especially when the disclosures are not disseminated by companies themselves, but by their stakeholders/stakeseekers.

This paper investigates stakeholders-companies dialoguing on SM triggered by involuntary disclosures. The analysis of the 142,910 tweets from Dell, H&M, Intel, Nestle,

Danone, HP and GE allows us to conclude that companies engage in the stakeholder initiated/sustained dialogue regarding CSR-related issues. Out of five rhetoric strategies proposed by Ardiana (2019) (denial, evasion of responsibility, reducing offensiveness of event, corrective actions, mortification), mortification is most frequently used. Mortification strategy allows us to assume that problems are acknowledged by company and it asks stakeholders for forgiveness. It should be assessed positively, since without such acknowledgment and apologies, corrective actions undertaken by companies are considered symbolic (Lauzen, 2016; Ardiana, 2019). The least preferred response strategy used by companies is an evasion of responsibility.

Our findings indicate that the replies to the involuntary disclosures were found to achieve greater public resonance and engage stakeholders more in the dialogue than general firm replies. Companies provided stakeholders with additional information (e.g. as a hyperlink) while responding to involuntary disclosures, which proves that they cared about making them more informed about the issue. Our results also suggest that stakeholders engage in dialogue with the companies triggered by involuntary disclosures. Stakeholders better perceive longer and more complicated text than a shorter and more understandable one, but they presser to reply and retweet to less complicated tweets. What is more, when stakeholders disapprove the content of the disclosure or are critical about companies’ actions or when the

20 tweet has no hashtag they are more willing to comment. The use of user mention convention in the replies is not appreciated by the stakeholders, but it increases the likelihood of retweeting and commenting.

We also documents how stakeholders reacted to the company’s attempts to respond to involuntary disclosure. The findings reveal that the response strategy aimed at the reduction of the offensiveness attracts less favorite buttons (e.g., likes). On the other hand, stakeholders are more likely to reply to company tweets when the company chooses denial or evasion of responsibility as a strategy for responding to stakeholders’ initiated involuntary disclosures.

Denial as a response strategy for involuntary disclosure is also likely to produce more tweeter traffic as the stakeholders are more likely to reply to the company tweet with a comment.

Our study contributes to the literature on non-financial disclosures, stakeholders engagement and dialogic accounting. It builds on but also extends the prior research to bring to the attention the stakeholders’ initiated involuntary disclosures, which may result in opportunities and threads to companies. We make an attempt to answer Dumay and Guthrie

(2017) call and fill the research gap by providing new insights into the companies’ strategies used to manage involuntary disclosures. The findings of this study also have practical implications and can be used by companies to develop the strategies in response to involuntary disclosures and on a broader level to company – stakeholders/stakeseekers dialogue on social media.

Lile all empirical studies, ours is not without limitations. First, we analyse communication in relation involuntary disclosures only on Twitter. It is possible that other social media require different communication management strategies and, therefore, the dialogue between company and stakeholders/stakeseekers may be different. Additionally, we examine corporate tweets in relation to six companies. Given the limitations, further research could investigate dialogic accounting conducted on other SM platforms (such as LinkedIn or

21 Facebook), and use different companies samples. Researchers can also employ such methods as in-depth case studies to explore the challenges companies face while managing involuntary disclosures on SM. The SM became an integral part in everyday life. Therefore, the role they play in communication between companies and their stakeholders and how they facilitate the dialogue and enhance engagement are certainly worth further scientific inquiry.

22 References

Ardiana, P. A. (2019). Stakeholder Engagement in Sustainability Reporting: Evidence of Reputation Risk Management in Large Australian Firms, Australian Accounting Review, 91(29), 726-746 Arenas, D., Lozano, J.M., & Albareda, L. (2009). The Role of NGOs in CSR: Mutual Perceptions Among Stakeholders. Journal of Business Ethics, 88(1), 175-197. Bacarella, C., Wagner T., Kietzmann J. H., & McCaerthy I.P., (2018). Social media? It's serious! Understanding the dark side of social media, European Management Journal, 36(4), 431-438. DOI: 10.1016/j.emj.2018.07.002 Bellucci, M. & Manetti, G. (2017), Facebook as a tool for supporting dialogic accounting? Evidence from large philanthropic foundations in the United States, Accounting, Auditing & Accountability Journal, 30(4), 874-905. https://doi.org/10.1108/AAAJ-07- 2015-2122 Bellucci, M., Simoni, L., Acuti, D. & Manetti, G. (2019), Stakeholder engagement and dialogic accounting: Empirical evidence in sustainability reporting, Accounting, Auditing & Accountability Journal, 32(5), 1467-1499. https://doi.org/10.1108/AAAJ- 09-2017-3158 Bilinski P. (2019). Living in the digital age: The usefulness of Twitter, YouTube and Instagram in corporate communication. Working paper, Cass Business School. Bozzolan, S., Cho, C. H., & Michelon, G. (2015). Impression Management and Organizational Audiences: The Fiat Group Case. Journal of Business Ethics, 126(1), 143–165. https://doi.org/10.1007/s10551-013-1991-9 Campra, M., Esposito, P., & Lombardi, R. (2020). The engagement of stakeholders in nonfinancial reporting: New information-pressure, stimuli, inertia, under short- termism in the banking industry. Corporate Social Responsibility and Environmental Management, Early View, 1–9. https://doi.org/10.1002/csr.1896 Cho, C. H., Roberts, R. W., & Patten, D. M. (2010). The language of US corporate environmental disclosure. Accounting, Organizations and Society, 35(4), 431–443. https://doi.org/10.1016/j.aos.2009.10.002 Cohen, J., Kass, N., & Beyrer, Ch, (2017). Human Rights and public Health Ethics. Responding to the Global HIV/AIDS Pandemic, In: M. J. Selgelid and T. Pogge, (eds.), Health Rights. The International Library of Essays on Rights, Routledge, NY [reprinted]. Coleman, R., & Wu, H. D. (2010). Proposing emotion as a dimension of affective agenda setting: Separating affect into two components and comparing their second-level effects. Journalism & Mass Communication Quarterly, 87, 315–327. Crane, A. & Livesey, D. (2003). Are You Talking to me? – Stakeholder Communication and the Risks and Rewards of Dialogue. In: J. Andriof, S.,Waddock, B. Husted and R. S. Sutherland (eds.), Unfolding Stakeholder Thinking 2: Relationships, Communication, Reporting and Performance, Greenleaf, Sheffield, 39–5. Dumay, J. (2016). A critical reflection on the future of intellectual capital: from reporting to disclosure. Journal of Intellectual Capital, 17(1), 168-184. Dumay, J. & Guthrie, J. (2017). Involuntary disclosure of intellectual capital: is it relevant? Journal of Intellectual Capital, 18 (1), 29-44. European Commission (2017). Guidelines on nonfinancial reporting (methodology for reporting nonfinancial information), C/2017/4234. https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX:52017XC0705(01) (accessed 16th June 2020)

23 European Commission (2019). Guidelines on reporting climate-related information. Guidelines on nonfinancial reporting: Supplement on reporting climate-related information C/2019/4490. https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A52019XC0620%2801%29 (accessed 16th June 2020). Ferrara, E., & Yang, Z. (2015). Quantifying the effect of sentiment on information diffusion in social media. PeerJ Computer Science, 1, e26, https://doi.org/10.7717/peerj-cs.26. Freeman, R. E. (2017). The new story of business: Towards a more responsible capitalism. Business and Society Review, 122(3), 449–465. https://doi.org/10.1111/basr.12123 Garcés-Ayerbe, C., Rivera-Torres, P., & Suárez-Perales, I. (2019). Stakeholder engagement mechanisms and their contribution to eco-innovation: Differentiated effects of communication and cooperation. Corporate Social Responsibility and Environmental Management, 26(6), 1321-1332. https://doi.org/10.1002/csr.1749 Gilbert, C. J., & Hutto, E. (2014). VADER: A Parsimonious Rule-based Model for Sentiment Analysis of Social Media Text. Eighth International Conference on Weblogs and Social Media (ICWSM-14). Gomez-Carrasco, P., & Michelon, G. (2017). The Power oakeholders's’ Voice: The Effects of Social Media Activism on Stock Markets. Business Strategy and the Environment, 26(6), 855–872. GRI (2018), GRI Standards, https://www.globalreporting.org/standards/gri-standards- download-center/ (accessed 16th June 2020). Herremans, I. M., Nazari, J. A., & Mahmoudian, F. (2016). Stakeholder relationships, engagement, and sustainability reporting. Journal of Business Ethics, 138(3), 417– 435. https://doi.org/10.1007/s10551-015-2634-0 Holzer (2008). Turning stakeseekers into stakeholders: a political coalition perspective on the politics of stakeholder influence, Business & Society, 47(1), 50-67. ISEA (1999). AccountAbility 1000 (AA1000): Standard, Guidelines and Professional Qualification, Institute of Social and Ethical AccountAbility, London. Kaplan, A.M. & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of social media. Business Horizons, 53(1), 59-68. Lauzen, M.M. (2016), Image Repair: A Case Study of Thierry Fremaux and the Cannes Film Festival, PublicRelationsReview, 42 (1),170–5. Lardo, A., Dumay, J., Trequattrini, R., & Russo, G. (2017). Social media networks as drivers for intellectual capital disclosure Evidence from professional football clubs. Journal of Intellectual Capital, 18(1), 63 – 80. Lodhia, S., Kaur, A. & Stone, G. (2020), The use of social media as a legitimation tool for sustainability reporting: A study of the top 50 Australian Stock Exchange (ASX) listed companies, Meditari Accountancy Research, 28(4), 613-632. https://doi.org/10.1108/MEDAR-09-2019-0566 Lodhia, S. & Stone, G. (2017), Integrated reporting in an internet and social media communication environment: conceptual insights, Australian Accounting Review, 27(1), 17-33. Manetti, G., & Bellucci, M. (2016). The use of social media for engaging stakeholders in sustainability reporting. Accounting, Auditing & Accountability Journal, 29(6), 985– 1011. Manning, B., Braam, G., & Reimsbach, D. (2018). Corporate governance and sustainable business conduct—Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices.

24 Muslu, V., Mutlu, S., Radhakrishnan, S., & Tsang, A. (2019). Corporate Social Responsibility Report Narratives and Analyst Forecast Accuracy. Journal of Business Ethics, 154(4), 1119–1142. https://doi.org/10.1007/s10551-016-3429-7 Okazaki, S., Plangger K., West, W., & Menéndez, H. (2019). Exploring digital corporate social responsibility communications on Twitter, Journal of Business Research, https://doi.org/10.1016/j.jbusres.2019.09.006., in press Pisano, S., Lepore, L., & Lamboglia, R., (2017). Corporate disclosure of human capital via LinkedIn and ownership structure An empirical analysis of European companies. Journal of Intellectual Capital, 18(1),102 – 127. Ramírez, Y. & Tejada, Á. (2019). Digital transparency and public accountability in Spanish universities in online media. Journal of Intellectual Capital, 20(5), 701-732. Rodrigue, M., Magnan, M. & Boulianne, E. (2013). Stakeholders's’ Influence on Environmental Strategy and Performance Indicators: A Managerial Perspective. Management Accounting Research, 24, 301-316. Saxton G.D, Gomez L., Hgoh Z., Lin Y. & Dietrich S., (2020), Do CSR Messages Resonate? Examining Public Reactions Firms’ CSR Efforts on Social Media, Journal of Business Ethics, 155, 359-377. Saxton, G.D., Ren, C. & Guo, C. (2020). Responding to Diffused Stakeholders on Social Media: Connective Power and Firm Reactions to CSR-Related Twitter Messages. Journal of Business Ethics, https://doi.org/10.1007/s10551-020-04472-x Saxton, G. D., & Waters, R. D. (2014). What do Stakeholders Like on Facebook? Examining Public Reactions to Nonprofit Organizations’ Informational, Promotional, and Community-Building Messages. Journal of Public Relations Research, 26(3), 280– 299. https://doi.org/10.1080/1062726X.2014.908721 She, C., & Michelon, G. (2019). Managing stakeholder perceptions: Organized hypocrisy in CSR disclosures on Facebook. Critical Perspectives on Accounting, 61, 54–76. https://doi.org/doi.org/10.1016/j.cpa.2018.09.004 Shrives, P.J. & Brennan, N.M. (2017). Explanation for Corporate Governance Non- complience: A Rhetorical Analysis. Critical Perspectives on Accounting, 49, 31-56. Stocker, F., de Arrude, M., de Mascena, K.M.C. & Boaventura, J. M. G. (2020) Stakeholder engagement in sustainability reporting: A classification model, Corporate Social Responsibility Environment and Management, 1–10. DOI: 10.1002/csr.1947 Wilson, D. W., Schuetzler, R. M.; Dorn, B.; & Proudfoot, J. G., (2015).When Disclosure is Involuntary: Empowering Users with Control to Reduce Concerns, Information Systems and Quantitative Analysis Faculty Proceedings & Presentations. 17. https://digitalcommons.unomaha.edu/isqafacproc/17

25 Figure 1. Research Framework

26 Table 1. Rhetorical Strategies

No Strategy Explanation Denial 1 Simple denial The company conceals or disguises information, which is supposed to be disclosed. This can be in various forms, for example, the company includes information about non-compliance, but it does not state the reason or explanation for it, or the company states that a problem has been resolved, but it does not provide any explanation as to why the problem occurred in the first instance. Alternatively, the company may use 'weasel words' to distract or mislead readers from the company's non-compliance, for example, 'The company fully complies with . . . except for . . . .'. 2 Shifting the The company thinks that it should not be held responsible because another party blame: has been identified as responsible Evasion of responsibility 3 Provocation The company tries to avoid responsibility by undertaking offensive acts in response to another wrongful act. 4 Defeasibility The company argues that its responsibility may be annulled or invalidated due to lack of knowledge and/or control over the important factors of the wrongful act.

5 Accident The company may make an excuse that it is an accident, which was never meant to happen and beyond the company's control. 6 Good intentions The company may ask not to be (fully) responsible for the negative situation because there were no evil motives behind it. Instead, the negative outcome was actually based on good intentions. Reducing offensiveness of event 7 Bolstering: When the company is being accused of a negative event, it may reduce the offensiveness of the event by strengthening some positive idea through delivering more positive information about the company which contradicts the negative event being problematised. 8 Minimisation: The company admits the problem and acknowledges its responsibility, but argues that the problem is not as serious as it appears. 9 Differentiation: The company tries to compare the event being problematised with other more wrongful acts to lessen negative feelings. 10 Transcendence: When the company is blamed for an offensive act, the company may reframe that offensive act by putting it into a broader context and less offensive reference. In other words, the 'end justifies the means'. 11 Attacking The company may fight back against the accuser(s) by questioning the data and/or accuser: information being used to accuse the company. 12 Compensation: The company offers or provides (financial and/or nonfinancial) compensation to stakeholders who are affected by the company's actions to counterbalance their negative feelings Corrective action 13 Corrective The company declares to fix the problem either by returning the condition to its action former state or by promising to do something to prevent a reoccurrence of the same problem in the future. Mortification 14 Mortification The company acknowledges its responsibility and asks for forgiveness.

15 Ingratiation The company tries to obtain sympathy using persuasive and subtle blandishments. 16 Self-promotion The company tries to promote itself by making claims about its achievements and/or the company instantiates good practice to other companies.

27 17 Attribution The company tries to provide causal explanation of an event by regarding it as being caused by something or someone else. 18 Supplication The company tries to ask for something earnestly or humbly.

19 Intimidation The company tries to challenge or even attack something with which the company should comply Source: based on Ardiana (2019).

28 Table 2. Definition of Variables

Variables Definition FAV A dummy variable equal one if a stakeholder reacted to a firm reply with the favourite button and zero otherwise. RT A dummy variable equal one if a stakeholder reacted to a firm reply with the retweet button and zero otherwise. REP A dummy variable equal one if a stakeholder reacted to a firm reply with comment and zero otherwise. INVFIRMREPLY A dummy variable equal one if the firm replied to an involuntary disclosure and zero otherwise. RS1 A dummy variable equal one if the firm employed a rhetorical strategy of denial in the reply to an involuntary disclosure and zero otherwise. RS2 A dummy variable equal one if the firm employed a rhetorical strategy of evasion of responsibility in the reply to an involuntary disclosure and zero otherwise. RS3 A dummy variable equal one if the firm employed a rhetorical strategy of reducing offensiveness of event in the reply to an involuntary disclosure and zero otherwise. RS4 A dummy variable equal one if the firm employed a rhetorical strategy of corrective actions in the reply to an involuntary disclosure and zero otherwise. RS5 A dummy variable equal one if the firm employed a rhetorical strategy of mortification in the reply to an involuntary disclosure and zero otherwise. FIRMSENT Sentiment of firm reply, measured using VADER sentiment dictionary. READ The readability of firm reply, measured using Flesch-Kincaid Readability score. FIRMURL A dummy variable equal one if the firm reply contains a hyperlink and zero otherwise. FIRMMENTION A dummy variable equal one if the firm reply mentions an account (i.e. contain “@”) FIRMHASH A dummy variable equal one if the firm reply contains a hashtag (i.e. “#”)

29 Table 3. Firm Replies to Involuntary Disclosures Firm Total Replies Replies to Involuntary Percentage % Disclosure Danone 157 30 19.11 Dell 49892 374 0.75 HM 6960 484 6.95 HP 14799 6 0.04 Intel 5766 38 0.66 Nestle 4562 3480 76.28

30 Table 4. Rhetorical Strategies Used in Firm Replies to Involuntary Disclosures Firm Replies to RS1- RS2-Evasion of RS3-Reducing RS4- RS5- Involuntary Denial Responsibility Offensiveness Corrective Mortification Disclosure of Event Actions Danone 30 2 2 7 3 23 Dell 374 20 115 6 23 288 HM 484 170 23 162 71 345 HP 6 0 0 0 2 4 Intel 38 2 0 5 4 33 Nestle 3480 1434 4 1237 1134 3206 Total 4412 1628 144 1417 1237 3899

31 Table 5. Descriptive Statistics of Variables Panel A. Full Sample of Firm Replies to Stakeholder Tweets Variables No. Mean SD Min P25 P50 P75 Max FAV 82136 0.24 0.43 0 0 0 0 1 RT 82136 0.12 0.33 0 0 0 0 1 REP 82136 0.25 0.43 0 0 0 1 1 INVFIRMREPLY 82136 0.05 0.23 0 0 0 0 1 FIRMSENT 82136 0.4 0.38 -0.92 0 0.46 0.73 0.98 READ 82136 6.26 3.47 -15.7 4.1 6 8 76.4 FIRMURL 82136 0.29 0.45 0 0 0 1 1 FIRMMENTION 82136 0.47 0.5 0 0 0 1 1 FIRMHASH 82136 0.11 0.31 0 0 0 0 1 Panel B. Subsample of Firm Replies to Involuntary Disclosures Variables No. Mean SD Min P25 P50 P75 Max FAV 4412 0.3 0.46 0 0 0 1 1 RT 4412 0.18 0.39 0 0 0 0 1 REP 4412 0.37 0.48 0 0 0 1 1 RS1 4412 0.37 0.48 0 0 0 1 1 RS2 4412 0.03 0.18 0 0 0 0 1 RS3 4412 0.32 0.47 0 0 0 1 1 RS4 4412 0.28 0.45 0 0 0 1 1 RS5 4412 0.72 0.45 0 0 1 1 1 FIRMSENT 4412 0.32 0.4 -0.92 0 0.44 0.65 0.95 READ 4412 9.38 3.54 -15.7 6.8 9.1 11.7 27.3 FIRMURL 4412 0.57 0.5 0 0 1 1 1 FIRMMENTION 4412 0.28 0.45 0 0 0 1 1 FIRMHASH 4412 0.11 0.31 0 0 0 0 1 All variables are defined in Table 2.

32 Table 6. Correlation Matrix Panel A. Full Sample of Firm Replies to Stakeholder Tweets Variables 1 2 3 4 5 6 7 8 9 1 FAV 1 2 RT 0.35*** 1 3 REP 0.07*** 0.07*** 1 4 INVFIRMREPLY 0.03*** 0.04*** 0.06*** 1 5 FIRMSENT 0.09*** 0.03*** -0.06*** -0.05*** 1 6 READ 0 0.03*** 0.04*** 0.21*** -0.13*** 1 7 FIRMURL -0.04*** 0.08*** -0.02*** 0.15*** -0.07*** 0.08*** 1 8 FIRMMENTION -0.02*** 0.07*** 0.03*** -0.09*** -0.07*** 0.04*** -0.05*** 1 9 FIRMHASH 0.11*** 0.12*** -0.01** 0 0.18*** -0.02*** 0.02*** 0.17*** 1 Panel B. Subsample of Firm Replies to Involuntary Disclosures Variables 1 2 3 4 5 6 7 8 9 10 11 12 13 1 FAV 1 2 RT 0.42*** 1 3 REP 0.10*** 0.08*** 1 4 RS1 -0.09*** 0 -0.01 1 5 RS2 0 0.03 -0.03 -0.12*** 1 6 RS3 0.02 -0.02 0.05*** -0.18*** -0.13*** 1 7 RS4 -0.04* -0.10*** 0.03 -0.22*** -0.10*** 0.11*** 1 8 RS5 0.09*** -0.02 0.08*** -0.35*** -0.09*** 0.12*** 0.25*** 1 9 FIRMSENT -0.04* -0.05** 0 -0.17*** -0.06*** 0.15*** 0.05*** 0.11*** 1 10 READ 0.06*** 0.01 0.02 -0.31*** 0.03* 0.10*** 0.27*** 0.17*** 0.11*** 1 11 FIRMURL -0.05*** -0.03 -0.07*** 0.13*** -0.04* -0.08*** -0.11*** -0.03 0.05** -0.10*** 1 12 FIRMMENTION 0.03* 0.18*** -0.04* 0.18*** 0.24*** -0.26*** -0.28*** -0.28*** -0.06*** -0.14*** 0.21*** 1 13 FIRMHASH -0.16*** -0.06*** -0.15*** 0.34*** -0.06*** -0.22*** -0.20*** -0.44*** 0.07*** -0.32*** 0.25*** 0.39*** 1 Note: All variables are defined in Table 2. * p<0.05, ** p<0.01, *** p<0.001

33 Table 7. Stakeholder Reactions on Firm Replies to Involuntary Disclosures (1) (2) (3) Variables FAV RT REP

INVFIRMREPLY -0.312*** 0.212*** 0.373*** (0.059) (0.067) (0.052) FIRMSENT 0.513*** 0.259*** -0.368*** (0.025) (0.033) (0.022) READ -0.003 0.016*** 0.010*** (0.003) (0.003) (0.002) FIRMURL -0.271*** -0.102*** -0.228*** (0.024) (0.032) (0.022) FIRMMENTION -0.064** 0.117*** 0.226*** (0.027) (0.034) (0.025) FIRMHASH 0.483*** 0.504*** -0.071** (0.031) (0.035) (0.031) Constant -2.733*** -2.382*** -0.807*** (0.758) (0.286) (0.209) Observations 82,136 82,098 81,881 Firm FE YES YES YES Year FE YES YES YES Pseudo R2 0.131 0.173 0.0231 Note: All variables are defined in Table 2. Observation number dropped due to perfect prediction. Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

34 Table 8. Stakeholder Reactions on Rhetorical Strategies Used in Firm Replies to Involuntary Disclosures (1) (2) (3) Variables FAV RT REP

RS1 -0.114 0.205* 0.135* (0.091) (0.116) (0.081) RS2 -0.131 0.643** -0.407 (0.270) (0.319) (0.249) RS3 -0.158* -0.053 0.078 (0.082) (0.105) (0.074) RS4 0.109 0.212 0.006 (0.103) (0.136) (0.089) RS5 0.110 0.021 0.049 (0.101) (0.116) (0.088) FIRMSENT -0.164* -0.000 0.047 (0.094) (0.124) (0.083) READ 0.019* 0.033** -0.022** (0.012) (0.014) (0.010) FIRMURL 0.005 -0.160 -0.125* (0.078) (0.098) (0.069) FIRMMENTION 0.640*** 0.571*** 0.374*** (0.141) (0.157) (0.125) FIRMHASH 1.335*** 0.579** -0.731*** (0.345) (0.290) (0.241) Constant -5.758*** -4.533*** -0.710 (1.294) (1.018) (0.477) Observations 4,406 4,403 4,403 Firm FE YES YES YES Year FE YES YES YES Pseudo R2 0.178 0.199 0.0345 Note: All variables are defined in Table 2. Observation number dropped due to perfect prediction. Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1