The social value generation perspective of corporate performance measurement

Abstract

Purpose There is currently a host of measurements of corporate social performance (MCSPs) each with its own individual merits and concerns. This paper aims to bring new insights into measuring corporate social performance (CSP) by advocating the use of a complementary indicator known as the social contribution value per share (SCVPS) developed by the Shanghai Stock Exchange in China. Design/methodology/approach A three-dimensional model is built to dissect the theoretical foundation of SCVPS. Next, this paper undertakes an extensive literature review of the criteria and methodologies which SCVPS relies upon to assess a firm’s social performance. Then SCVPS is critically compared with other commonly used MCSPs from different angles. Findings This paper highlights the major limitations of some MCSPs, namely, the lack of transparency, selection biases and the exclusion of controversial industries. It is suggested that SCVPS is worthy to be considered as a complementary indicator for CSP given its innovativeness, standardization and practicability. Practical implications The authors argue that there is great theoretical and practical significance for firms to set per-share social contribution indicators using SCVPS on a global basis, which helps to enrich decision-making processes when combined with other MCSPs. Originality/value This paper suggests SCVPS as a complementary indicator of social performance and anatomizes this choice indicator with other MCSPs in terms of their theoretical underpinnings, practical applications and probable deficiencies.