Hypocrisy and legitimacy in the aftermath of a scandal: an experimental study of stakeholder perceptions of nonfinancial disclosure

Purpose This study aims to investigate how stakeholders perceive the company's nonfinancial disclosure after a scandal has occurred. More specifically, authors examine whether and sustainability reporting practices in aftermath of can influence perceptions terms hypocrisy legitimacy. Design/methodology/approach The present research represents companion paper another this issue that investigates adaptation companies' behaviors scandal. results initial qualitative informed subsequent quantitative developed article. build on evidence main perform 2 × between-subjects experiment actions companies aim restore their eroded legitimacy through social, environmental (SES) reporting. Findings suggest when take responsibility develop remedial, socially responsible corporate activities are perceived as less hypocritical more legitimate. Moreover, we show an interaction effect between taking developing remedial perception. Originality/value takes advantage experimental design effects SES from perspective stakeholders. provides insightful theoretical practical implications for managers regarding handle reputational loss avoid hypocrisy.