Legitimacy theory has been used by many researchers studying social and environmental reporting practices. Many indicate that corporations legitimise their activities because corporate management reacts to community expectations (Tilt 1994; Patten 1992; Guthrie and Parker 1990; Hogner 1982). Deegan et al. (1996) postulated that corporate social and environmental responsibility disclosure practices were responsive to environmental pressures on the basis of legitimacy theory. Campbell et al. (2003) argued that legitimacy theory explained that social and environmental disclosure can be used to narrow or close the gap between company actions and social concerns. Management must seek a relationship between outside perceptions of its social concerns and activities or actions to serve their corporate needs (Deegan et al. 2000; Hogner 1982).
Legitimacy theory stresses how corporate management reacts to community expectations (Tilt 1994; Patten 1992; Guthrie and Parker 1990). Annual or environmental reports, therefore, are used to reinforce legitimacy responsibilities for environmental situations (Patten 1992; Deegan and Rankin 1996)