In a Material World: The Politics of Introducing Country-by-Country Reporting in the EU

Adam Baden

Student thesis: Master thesis


This thesis originates in an ambition to understand the political process of how purpose and form were assigned to Country-By-Country Reporting (CBCR) in the European Commission’s proposals for the new Accounting Directive and the Transparency Directive. The Commission proposes to introduce requirement for companies in the extractive and logging industries to annually disclose payments to governments on a country- and project-level basis in a special report for the purpose of enabling citizens in resource-rich countries to hold their government to account for the revenues they obtain from natural resources. Taking a poststructuralist approach to reporting and drawing specifically on Discourse Theory in the tradition of Laclau and Mouffe, the thesis investigates the hegemonic projects struggling to produce dominant framings of CBCR in the process leading up to the Commission’s Directives proposals. Based on an examination of the responses to the Commission’s public consultation on CBCR and 13 interviews with organizations involved in this consultation, the first stage of the analysis finds two competing hegemonic projects. First, it finds a project exercising an expansive form of hegemony united around a demand for transparency. This project challenges the prevailing reporting order and its negation of the information needs of other financial statement users than investors and capital providers. To ameliorate the lack of transparency, this expansive hegemonic project promotes CBCR, revolving around a re-articulation of the concept of materiality. Furthermore, the first stage of the analysis finds a defensive, transformistic hegemonic project. This project defends the current disclosure regime by rearticulating the common cause claimed by the expansive project and frames CBCR as a threat to the logic of efficient markets which is the organizing principle of the transformistic project’s discourse. The second stage analyzes the Commission’s Impact Assessment on CBCR and the degree to which the Commission’s framing of CBCR reproduces the discourse of the two competing hegemonic projects. It finds that the Commission reproduces the expansive projects’ demands for transparency measure to address government corruption in resource-rich developing countries. However, the expansive project’s demands for CBCR measures to improve investors’ decision-making and to address issues of global tax governance are framed in accordance with the transformistic project’s assertion that financial statements should provide information to investors based on a management perspective of materiality. However, interestingly the thesis finds that a bifurcation of the definition of materiality is introduced in the Commission’s proposals to require information on payments, the materiality of which is defined from the country and project perspective.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2013
Number of pages93