Link Group's CSR Disclosure Practice

This assignment analyzes the Corporate Social Responsibility (CSR) disclosure practice of Link Group, a financial services company. It examines their sustainability report 2017, which is their third CSR report, and discusses the motivation behind their voluntary CSR disclosure. The analysis applies positive accounting theories, including legitimacy theory and stakeholder theory, to understand the company's approach to CSR reporting.

ACCT20074
Contemporary Accounting
Major Assignment
A Report on Corporate Social Responsibility (CSR) Reporting
Practice of
Link Administration Holdings Limited (ASX: LNK)

Executive Summary
This reportis about the Corporate Social Responsibility (CSR) reporting practice of Link
Administration Holdings, an ASX 200 listed firm.The study enlightens about the ongoing trend of CSR
disclosure by fast growing ASX firm. The analysis of Link Group’s Sustainability report, its CSR
disclosures and other relevant CSR information presented by Link Group in terms of Global Reporting
Initiative (GRI) standards, an international CSR reporting standard has been made. The findings shows
significance, reporting trend of CSR and how the theories i.e. the legitimacy and stakeholder’s theory
play a role in voluntary disclosure of CSR report. The findings will be helpful for theorganizations
particularly Information Technology (IT) companies or financial service sector companies aiming for
CSR reporting to figure out the recent trends of CSR disclosures, report practices and the theories for
motivation of CSR.

Table of Contents
1.0 Introduction................................................................................................................................................4
2.0 Descriptive Analysis of CSR Reporting and Disclosure Practices.................................................................4
2.1 About Link Group....................................................................................................................................4
2.2 CSR Reporting and Disclosure.......................................................................................................................4
2.2.1 People....................................................................................................................................................5
2.2.2 Environment..........................................................................................................................................6
2.2.3 Community............................................................................................................................................6
2.2.4 Supply Chain..........................................................................................................................................6
2.2.5 Governance and Management..............................................................................................................6
3.0 ComparativeAnalysis of Company’s Reporting Practice and CSR Reporting Guidelines.............................7
4.0 Critical Analysis of Company’s CSR Reporting Practice...............................................................................9
4.1 Is CSR report voluntary or mandatory for Link Group?.................................................................................9
4.2 CSR motivation of Link Group..................................................................................................................9
4.3 Legitimacy Theory and LNK’s CSR disclosure...........................................................................................10
4.4 Stakeholders Theory and LNK’s CSR disclosure..........................................................................................11
5.0 Summary of Findings......................................................................................................................................11
6.0 Conclusion................................................................................................................................................12
References

1.0 Introduction
Sustainability reporting has been one of the very popular reporting nowadays as it is focused in creating
value to the stakeholders and ensure the success of the business in long run by managing sustainable
risks. This report has been based on the Sustainability reporting or CSR reporting of Link
Administration Holdings Limited, an ASX200 listed fast growing firm in providing solution related to
superannuation fund, share registry, data management services, asset services as well as software
development solutions in 11 different countries. The report enlightens the reader about the elements
covered by Link Group’s CSR disclosures, their motivations, their sustainability policy, frameworks
and the analysis of the legitimacy theory and stakeholder’s theory in terms of their Sustainability report
2017.
2.0 Descriptive Analysis of CSR Reporting and Disclosure Practices
2.1 About Link Group
Link Administration Holdings Limited, a company incorporated in Australia, provides IT management
solutions for its clients in various business divisions, namely funds administration, corporate markets,
technology, innovation and assets services.It operates in 11 different countries and has altogether 4297
staffsin different locations as at 30 June 2017. It serves approximately 10 million superannuation
account holders and 35 million individual shareholders. The company has been able to successfully
attain the uninterrupted growth in its Operating EBITDA since past 15 years. Similarly, the Operating
NPAT was up by 21% and Statutory NPAT also increased by 101% in FY2017 compared to
FY2016.Link Group was listed in ASX after the issuance of its Initial Public Offering (IPO) on
October 2015.
Its core values such as professionalism, teamwork, integrity, respect and commitment plays a very
crucial role in the way they operate not only internally among the team members but externally to its
customers, clients and investors.
2.2 CSR Reporting and Disclosure
Since Link Group is swiftly growing locally as well as globally, the management believes that the
continuity of business is only possible ifopportunities are utilized and risks are identified and reduced
so as to make the business successful despite of rapid changes in technology and business
environments.In the annual report 2017, Link Group’s Managing Director Mr. John McMurtrie states

that the enhancement of sustainability approach and its reporting will bring positive changes in
company’s growth, evolvement and contribute towards making real difference in the global business.
The company has been publishing its Annual report since 2016 i.e. after its ASX listing. However, it
published its first standalone Sustainability Report 2014-15 in 2015 and since then it’s publishing the
Corporate Social Responsibility (CSR)report every year. The previous year’s CSR reports covered only
5 countries but since 2017 all 11 countriesin which it operates were covered. The CSR report 2017
consists of 37 pages in total and covers major topics such as their managing director’s message,
approach to sustainability, their performance, people, environment, community, supply chain and
governance along with supplementary information and reporting methodology.
According to the Sustainability Policy 2017, the aim of Link Group is to increase the positive and
sustainable effects of the business along with improvement in its financial position and reducing the
negative impacts of its business. The major stakeholdersidentified in their sustainability policy are their
employees, clients, shareholders, fund members, suppliers, investors and whole community. They have
extended their reporting on suppliers in FY2017to ensure that the suppliers are also equally committed
for the continuous improvement of their business as they are. During fiscal year 2017, Link Group has
extended its sustainability framework and is continuously engaged in reviewing on the ways to manage
the sustainability issue so that they can create value for their shareholders, staffs and the overall
community.
Link Group’s sustainability report is prepared according to ‘Core’ option of Global Reporting
Initiative’s (GRI) standards and includes only those disclosures which are considered material to their
business in all the countries it operates. Their main focus at present is on the areas that involves the
risks of sustainability so that they can identify and aim for continuous improvement.
The major disclosure included in the sustainability reporting are as follows:
2.2.1 People
Link Group has 4188 full time equivalents (FTE) employees working in 25 offices. It
focuses on the betterment of its people by promoting equal diversity and equal
opportunity by setting the targets for male and female employee for gender balance and
gender pay equity to be achieved during 2019.They prioritize to hire people locally most
of the times however they also hire people from overseas if required. They are focused
to know the reason behind the staff turnover and control it if possible. Furthermore, they

are providing training and development, performance review every 2 years and
providing parental leave to both male and female staff and ensure they return to their
work. Similarly, with application of different initiatives they are promoting employee
health and fitness and concentrates on maintaining good relations with their employees.
2.2.2 Environment
The disclosure related to environment are mainly on the energy use, air travel,
emissions, its intensity, paper, cardboard, plastics. But the disclosure of other materials
like IT hardware and non-paper personal waste generated are not done in their report.
2.2.3 Community
Link Group has introduced the community focused initiativeson education, health, and
ways to overcome both physical and economic disadvantage, environment and culture
inclusiveness. They have added charities such asLandcare Australia, GO foundation and
Humpty Dumpty Foundation in FY 2017. Various initiatives such as work place giving
through payroll of employees, providing one day volunteer leave per year to employees
to support a charity of their choice, employee fundraising, donation of goods, corporate
donation and other awareness programs.
2.2.4 Supply Chain
Link Group has identified and engaged with its material suppliers by supplying a
questionnairerelated to various sustainability aspects such as company’s risk and
policies, business continuity planning, public reporting, labor standards, environment
and community. Link group is reviewing on ways to encourage its material suppliers as
they contribute to the organization’s performance and sustainability and plans to report
regarding them in future reports
2.2.5 Governance and Management
The Board, in order to ensure for the long term growth of the company, has developed a
sustainability framework with features such as: publishing the Board approved
sustainability statement in the company’s website, to manage the material risk through
development of various policies and management structures and identifying the
sustainability issues and its reporting. Various risk management measures related to
information management security, business continuity and disaster recovery, privacy

and security, ethics, policies and procedures were revised by the Board in FY2017 and
disclosed.
3.0 ComparativeAnalysis of Company’s Reporting Practice and CSR
Reporting Guidelines
Link Group publishedits sustainability report on the basis of ‘Core’ option of Global Reporting
Initiative’s (GRI) G4 standards and follows the GRI financial Services sector supplement as a
reference.The guidelines on GRI is considered as an emerging instrument through which a
company is able to communicate with their stakeholders about non-financial aspects related to
performance and accountability (Willis, 2008).
In 2017, Link Group extended its disclosure from 5 countries to 11 countries and has disclosed
those material topics which weremost relevant to their business and had some measure of control.
A total of 16 disclosures were made in relation to the relevancy and interest of the key
stakeholders. However, those disclosures are covered within just the 12 material topics of GRI
standards.
According to GRI, there are universal standards and topic specific standards to disclose
information more systematically. The universal standards consists of foundations (GRI101),
general disclosures (GRI102) and management approach (GRI103). These universal standards
consists reporting principle, contextual information and management approach respectively. In
terms of topic specific standards, guidelines are divided into three categories namely; economic,
environmental and social with each categories covering different specific aspects to report about
the organization’s impact on those categories. In Link Group’s sustainability report, the reporting
principles are mentioned to define report content and quality in the reporting methodology section.
This section has disclosed information regarding the material topic and boundaries, report content,
stakeholder engagement, future reporting and external assurance.
The general disclosures (GRI 102) includes categories such as organizational profile, strategy,
ethics and integrity, governance, stakeholder engagement and reporting practice.Link Group CSR
report partially disclose information about the organizational profile and governance. The
precautionary approach GRI 102-11 is considered not applicable to Link Group as Weir andLoke
(2007) states that precautionary measures are adopted only in terms of environmental and natural
resource management areas as there may exist uncertainty and health hazards. Moreover, the

sustainability report only contains one general disclosure relate to governance i.e. GRI 102-18
(Governance Structure of Organization) and the remaining 21 disclosures i.e. from GRI 102-19 to
102-39 are not discussed. Some of the omitted aspects related to governance are disclosure about
the executive level responsibility for economic, environmental and social issues, disclosure about
the highest governance body and its composition, role of highest governance body of the
organization in risk management, sustainability reporting and about remuneration policies.
According to Link Group, only the material aspects are disclosed. However, research states that
only those companies that possess good corporate governance are considered responsible socially
and environmentally in terms of companies having poor corporate governance (Chan et al., 2014).
In terms of specific disclosures related to economic aspect, market presence and anti-corruption
were only covered. The market presence only disclose about the senior management hired from
local community whereas disclosure 202-1 which is related to the standard entry level wage by
gender compared to local minimum wageis not revealed. The other topic of economic aspects such
as economic performance, indirect economic impact, procurement practices and anti-competitive
behaviorare also not included.
According to GRI standard, the environmental category consists of different aspect related to
materials, energy, water and effluents, biodiversity, emissions, effluents and waste, environmental
compliance and supplier environmental assessment. Among these Link Group has disclosed
materials, energy and emissions onlybecause its business is related with technology and not the
production of material products. The omission of water, coal, steam, energy sold and ground travel
are because of their irrelevancy the Link Group.
The another topic specific standard, i.e. social guideline has been divided into various sub
categories such as labor practices, human rights,and society and product responsibility. Under the
labor practices and social work, Link Group has fully disclosed all the aspects related to the
employment but has omitted to state about the specific benefits country wise in GRI 401-3
(Benefits only available to full time employees) because of too much variation. The disclosure of
this omission would be helpful to its stakeholders so that they know whether Link group is
providing equal benefits to staffs all around the world or discrimination exist globally. The training
and education topic disclose the training hours by gender/ category but omits about on the job
training provided as it considers those types of training is difficult to quantify because it varies by
role and seniority. Similarly, the disclosure 404-2 i.e. the programs for upgrading employee’s skills

and transition assistance programs is also not included in its CSR report. Link group has fully
disclosed the diversity and equal opportunity of their employees. Being a provider of technology
enabled solutions to its clients, the CSR report of Link Group has fully disclosed about the
customer privacy and compliance related to product responsibility category.Different controls
related to Information Technology is revealed in its CSR reports as well as the training provided to
staffs on obligation to the Privacy Act1998 (Cth) is mentioned as their nature of business is related
to data management service. However, Link Group does not report about other sub categories
related to the human rights and society as specified in the GRI standards.According to them,
impacts related to human rights and society are less relevance to their business.Morhardt (2009) has
stated that it is difficult for a company to figure out the risk of human rights such as child labor,
forced labor or lack of freedom of association and disclose itdue to uncertainty.
4.0 Critical Analysis of Company’s CSR Reporting Practice
4.1 Is CSR report voluntary or mandatory for Link Group?
According to GamerschlagR., et al. (2011), Corporate Social Responsibility is related to the
company’s voluntary contribution to sustainable developmentin terms of economic, social and
environmental benefits to its stakeholders. Link Group published its first CSR report in 2014-15
i.e. after being immediately listed in ASX on October 2015. The financial reports of the
company shows the increasing operating EBITDA since the past 15 years and this profit factor
can have positive impact on their clients or stakeholders about the company. However, the
company choses to publish the CSR report. In Australia, the preparation of CSR report is not
mandatory.Furthermore, it can also be noted that the nature of their business has less negative
impact on environment and the stakeholders compared to any other carbon emittingor pollution
creating companies. But the management has chosen to prepare CSR report. So the following
section 4.2 expresses the research regarding motivation for Sustainability report preparation.
4.2 CSR motivation of Link Group
In today’s world, sustainability reporting is becoming very popular in organizations especially
public organizations so that they can disclose about their progress towards sustainable
development and meet their stakeholder’s expectations (Cantele S., et al., 2018).Link Group has
been successful in achieving very good financial position since the last few years i.e. from their
share registry business to a global financial services and technological company.Due to the

growth in operating performance of Link Group and increasing number its operations and
responsibility, the management believes that financial disclosure is not enough to meet the
expectations of its stakeholders.The managing director of Link Group states that the
organization is involved in continuous innovation and evolution from paper based solutions to
technological solutions to ensure sustainable growth of the business. Furthermore, the managing
director also states that because of the globalization, increasing societal expectations, changing
technology and business environments, Link Group believes that sustainable reporting will help
them identify the material risks so that they can ensure the long term success of the company.As
being a market leader in providing technological administrative solutions and operating with
over 7000 employees across 17 jurisdictions, Link group has recognized its wider
responsibilities towards its stakeholders. This recognition of increased responsibility has given
Link Group the opportunity to generate value to its identified stakeholders such as employees,
customers, shareholders and whole community at large.
The theories such as legitimacy and stakeholder theory has been developed on the basis of
political economic theory and plays an important role in explaining the motivation of the
organization related to the CSR and sheds light on the analysis of Link Group’s CSR
information.
4.3 Legitimacy Theory and LNK’s CSR disclosure
The legitimacy theory has been developed by relying in the social contract and represents the
expectations that society have on how an organization conducts their business. With the
globalization and changing business environments the expectations of the society has widened
in terms of disclosure regarding on how it is operating.According to the website of Link group,
their clients and shareholders have an enormous amount of trust onthem so they are working to
ensure keeping the trust by identifying their needs and expectation and fulfilling them in the
future reports.As per Ward L. et al. (2007), the societal expectations keep on changing and so
does the condition of social contract containing managerial perception of the implicit and
explicit terms of the social contract. By considering the theory of legitimacy, Link Group has
seeks to identify as well as manage the sustainability risks that arise from change in the societal
expectations, business conditions, strategies, etc. in its Sustainability Policy published on
December 2017.If the company doesn’t disclose according to the expectations of society then
the survival of the organization will be difficult resulting in decreased profits. Furthermore

4.4 Stakeholders Theory and LNK’s CSR disclosure
The stakeholder’s theory is divided into ethical and managerial branch. The ethical branch holds
on to the fact that all the stakeholders must be treated equally and fairly by the
organization.However in terms of LNK, it has engaged deeply with internal stakeholders only
and considers to cover more external stakeholder’s in future report. The CSR report may be
misinterpreted if external stakeholder material to their business is omitted. Though LNK follow
GRI guidelines, they have still a lot to disclose about the stakeholder engagement in terms of
external environment. The GRI disclosure about the employees is fully disclosed in its CSR
report. So, the ethical aspect of stakeholders seems to be not applicable to Link Group.
In terms of managerial approach, the CSR reporting manages the interest and influence of
powerful stakeholders and their power matters a lot and have significant impact on the
organization.Link Group has identifies its key stakeholders who have material impact to the
organization’s success (Deegan, 2014). The disclosure in terms of the addressed stakeholders
are considered to gain and restore the organizational legitimacy (Van S.,2009).
5.0 Summary of Findings
The descriptive analysis of CSR reporting practice of Link Group reveals their major material
aspects i.e. their people, environment, supply chain, environment and governance. The
company uses Global Reporting Initiative guidelines (GRI) guidelines and follows financial
service sector supplement for supplementary reference and disclose about the internal and most
material aspects to their stakeholders. Since, Sustainability Report 2017 is just their third CSR
report about social, economic and environmental disclosure, their motivation seems to be driven
by the managerial approach related to stakeholder’s theory as the role of Link Group seems to
manage the organization for the benefit of its owners and powerful stakeholders (Deegan,
2014). The disclosure related to governance (under general disclosure) and topic specific
disclosure related to human rights and society aspects are not disclosed. The managing
director’s message in its CSR report provides insights to the motivation regarding its CSR
reporting.In almost every section of their CSR report, they demonstrate their commitment to
disclose more material information in the future so that they can be able to achieve
sustainability goals as identified in their board endorsed sustainable policy. The implication of
positive accounting theories i.e. legitimacy theory and stakeholders theory has provided more
insight to aspects related to the motivation of voluntary CSR disclosure by the Link group. As

the company wants to gain long term business success for gaining sustainability, the managerial
branch of stakeholder theory perfectly fits thecompany’s motivation for voluntary disclosure
and its CSR reporting and practices. Thus, the positive economy theory has justified the
motivation of CSR reporting to some extent.
6.0 Conclusion
After going through the CSR disclosure practice of Link Group, the importance of CSR reporting
has been of utmost importance in today’s competitive business world. The reporting of social,
environmental and economic aspects of the business will make the business sustainable in the long
run. The voluntary disclosure of the sustainability reporting will help the organization to get one
step ahead of its competitors as the company will be able to meet its societal expectations. If the
company does what the society expects to do then the society and the stakeholders will have
positive impact about the company and will prefer the same organization for further business. The
GRI standard is considered as widely used standard in disclosing different categories so that its
users get required information about its contribution to the society, community and the whole
community.

References
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