📄 other

The Digital Reputation Gap: Selective Corporate Digital Responsibility Disclosure in French Listed Companies

This study of 74 French listed firms reveals a "Digital Reputation Gap" where companies selectively disclose routinized digital responsibility themes while under-reporting accountability-sensitive issues, a disparity that persists despite strong corporate governance mechanisms.

Original authors: Ilyes Charchafa

Published 2026-07-27

📖 5 min read🧠 Deep dive

CC BY 4.0

Original authors: Ilyes Charchafa

Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). ✨ This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer

The Reputation Game: Why Companies Talk About Some Things and Hide Others

Imagine you are trying to judge a new friend. You ask them, "Are you a good person?" They might say, "Yes! I always lock my front door, I recycle my plastic, and I have a very organized schedule." These are easy things to say and easy to prove. But they might stay silent when you ask, "Do you ever judge people unfairly? Do you know how your actions hurt the environment? Do you have a plan for when your decisions go wrong?" These are the harder, messier questions. In the world of business, this is exactly what happens with "Corporate Digital Responsibility." It's the idea that companies need to be good stewards of technology, data, and the internet. Just like your friend, companies want to look good, so they talk a lot about the easy, safe topics. But researchers have noticed a pattern: companies often hide the hard stuff. This paper dives into that pattern, asking if having a smart, watchful board of directors can force companies to be honest about everything, or if they will just keep hiding the messy parts.

The Digital "Reputation Gap"

This study, titled The Digital Reputation Gap, looks at 74 big companies listed on the French stock market over three years (2021 to 2023). The researchers wanted to see if these companies were telling the whole truth about how they handle digital responsibility, or if they were just "cherry-picking" the good stories.

To understand their findings, imagine a company's reputation report as a menu at a restaurant.

The "Routinized" Menu: These are the safe, easy dishes. They include things like "We have strong cybersecurity locks," "We help people access the internet," and "We have a committee that watches over our data." These are like ordering a plain cheese pizza: everyone knows what it is, it's easy to make, and it rarely causes a scandal.
The "Accountability-Sensitive" Menu: These are the spicy, complicated dishes. They include things like "We explain how our AI makes decisions," "We admit how much carbon our servers burn," and "We talk about the risks of automation." These are like ordering a dish made of rare, unpredictable ingredients. If the chef messes up, the customer gets sick. If the company messes up, they get sued or shamed.

The researchers created a score called the Digital Reputation Gap (DRG). Think of this gap as the difference between how much the company talks about the "plain pizza" (routinized stuff) versus the "spicy dish" (sensitive stuff). A big gap means the company is talking a lot about the safe stuff and very little about the risky stuff.

What They Found: The Gap is Real

The study found a very clear, positive gap. In fact, for 94% of the company-years they looked at, the companies talked way more about the safe, routinized topics than the sensitive ones.

On average, companies disclosed about 0.48 (out of a possible 1.0) on the safe topics.
But they only disclosed about 0.28 on the sensitive topics.
This left a "gap" of 0.20, meaning the companies were significantly louder about their security policies than their ethical dilemmas.

The researchers also checked if this gap was getting smaller over time. They looked at the years 2021, 2022, and 2023. While companies did start talking a little bit more about everything as time went on, the gap didn't close. They were still talking about the "plain pizza" much more than the "spicy dish."

The Big Question: Can the "Watchdogs" Fix It?

The researchers wondered: "Maybe the companies just don't know how to talk about the hard stuff. What if they have a Board of Directors that is huge, full of tech experts, and has special committees just for digital issues? Would that force them to be more balanced?"

They tested six different "watchdog" features:

Board Size: Is the board big?
Board Independence: Are the members independent from the bosses?
CEO Duality: Is the CEO also the head of the board?
Board Digital Expertise: Do the board members actually know about tech?
Audit Committee Independence: Is the team checking the numbers independent?
Dedicated Digital Committee: Is there a specific group just for digital issues?

The Surprising Result:
The study found that having a big board, tech-savvy directors, or a special digital committee did help companies talk more. These companies disclosed more about the safe stuff AND more about the sensitive stuff.

However, and this is the crucial part, these "watchdogs" did not close the gap.
Even though the companies with smart boards talked more overall, they still talked about the "plain pizza" much more than the "spicy dish." The gap remained exactly the same size.

The data suggests that while good governance makes companies more chatty, it doesn't necessarily make them more honest about the difficult, messy parts of digital responsibility. The "watchdogs" seem to encourage the companies to expand their menu, but they don't force them to serve the spicy dishes.

Why This Matters

The paper concludes that we shouldn't just count how many words a company writes about digital responsibility. A company can write a huge report and still be hiding the most important parts.

If you are an investor, a regulator, or just a curious citizen, the lesson is this: Don't be fooled by a long report full of security policies and inclusion initiatives. Ask the hard questions. Look for the "spicy dishes" in the menu. If a company is only talking about the easy stuff, there is a "Digital Reputation Gap" hiding the truth about their ethics, their environmental impact, and their accountability for AI. The study suggests that simply having a smart board isn't enough to fix this; we need to demand a balanced conversation, not just a louder one.

Technical Summary: The Digital Reputation Gap in French Listed Companies

Problem Statement
The study addresses a critical gap in understanding how corporations communicate responsibility in the digital sphere. While digital transformation has expanded the domain of corporate accountability to include data governance, artificial intelligence, cybersecurity, and digital environmental impact, existing research often treats Corporate Digital Responsibility (CDR) disclosure as a homogeneous aggregate volume. The paper argues that this approach obscures a potential "Digital Reputation Gap" (DRG). This gap is defined as the disparity between disclosure on routinized CDR dimensions (e.g., data privacy, cybersecurity, digital inclusion, and governance structures) and accountability-sensitive dimensions (e.g., digital ethics, algorithmic fairness, digital environmental impact, and responsible innovation).

The core problem is that firms may construct a "responsible digital identity" by heavily disclosing on routinized, reputationally comfortable themes while under-disclosing on sensitive issues that expose unresolved ethical, environmental, or socio-technical vulnerabilities. The study investigates whether corporate governance mechanisms can mitigate this selective disclosure and rebalance the disclosure profile.

Methodology

Sample: A balanced panel of 74 non-financial French listed firms (SBF 120 index) observed over the period 2021–2023, yielding 222 firm-year observations. This period was selected to capture voluntary disclosure prior to the full implementation of the EU Corporate Sustainability Reporting Directive (CSRD) and the AI Act.
Data Collection: Data was manually extracted from Universal Registration Documents (URD) and explicitly incorporated annual or sustainability reports. External webpages and non-incorporated links were excluded to ensure the analysis focused on formal corporate reporting.
Measurement (CDRDI): A manually coded 47-item binary index (Corporate Digital Responsibility Disclosure Index) was developed. Items were categorized into six dimensions:
1. Data Privacy and Security
2. Digital Ethics
3. Digital Environmental Impact
4. Digital Inclusion, Access, and Awareness
5. Digital Governance and Transparency
6. Responsible Innovation, Deployment, and Economic Conduct
Variable Construction:
- Routinized CDR: The average of indices for Data Privacy/Security, Digital Inclusion, and Digital Governance.
- Accountability-Sensitive CDR: The average of indices for Digital Ethics, Digital Environmental Impact, and Responsible Innovation.
- Digital Reputation Gap (DRG): Calculated as $ROUTINE\_CDR - SENSITIVE\_CDR$ . A positive value indicates a gap favoring routinized disclosure.
Governance Variables: Board size, board independence, CEO duality, board digital expertise (proportion of directors with substantive digital experience), audit committee independence, and the presence of a dedicated digital committee.
Estimation: Pooled OLS regression with industry and year fixed effects, using firm-clustered robust standard errors. Robustness checks included random effects, firm fixed effects, an item-weighted alternative DRG, and the exclusion of 2021 data.

Key Results

Existence of the Gap (H1 Supported): Descriptive statistics confirm a substantial Digital Reputation Gap. The mean DRG is 0.203, and it is positive in 94.1% of firm-year observations. Firms disclose significantly more on routinized dimensions (mean 0.479) than on accountability-sensitive dimensions (mean 0.276).
Governance and Disclosure Volume: Board size, board digital expertise, and the presence of a dedicated digital committee are positively and significantly associated with both routinized and accountability-sensitive disclosure. This suggests that stronger governance and digital expertise lead to broader overall disclosure.
Governance and the Gap (H2 Not Supported): Crucially, none of the governance variables significantly reduced the Digital Reputation Gap in the main model. While governance mechanisms expand the total volume of disclosure, they do not appear to systematically rebalance the composition of that disclosure to favor accountability-sensitive issues over routinized ones.
Robustness: These findings hold across alternative specifications, including random effects, firm fixed effects, and item-weighted gap measures.

Key Contributions
The paper makes three specific theoretical and empirical contributions:

Corporate Reputation Theory: It extends reputation research by conceptualizing CDR disclosure as a mechanism for constructing a "responsible digital identity." It demonstrates that this identity construction is often selective, relying on the composition of disclosure rather than just its presence.
CDR Scholarship: It shifts the analytical focus from aggregate disclosure volume to the internal composition of disclosure. By distinguishing between routinized and accountability-sensitive dimensions, the study reveals that high disclosure levels can coexist with significant imbalances.
Corporate Governance and Disclosure: It challenges the assumption that stronger governance automatically improves disclosure credibility or balance. The findings suggest that while governance structures increase disclosure breadth, they do not necessarily constrain selective impression management in complex, emerging domains like digital responsibility.

Significance and Claims
The paper claims that the Digital Reputation Gap is a meaningful construct for assessing the credibility of corporate digital responsibility. The study posits that a credible responsible digital identity requires balanced disclosure across the full spectrum of digital issues, not just the "safe" or institutionalized ones.

The authors conclude that current governance mechanisms (board size, expertise, committees) are effective at expanding the visibility of digital responsibility but are insufficient to correct the selective nature of that visibility. Consequently, stakeholders, regulators, and boards should not assess digital governance credibility solely by the existence of structures or the volume of reporting. Instead, the focus must shift to whether firms disclose the accountability-sensitive issues that most directly test their digital accountability, such as algorithmic fairness and digital environmental impact. The study emphasizes that without a rebalancing of disclosure, firms risk creating reputational benefits through "comfortable" narratives while maintaining opacity on critical ethical and environmental vulnerabilities.