Management by objectives and corporate social responsibility disclosure

Abstract

Purpose – The purpose of this paper is to examine the relationship between remuneration for the achievement of objectives and sustainability, and – more specifically – the amount of attention that listed companies in Italy devote to defining, and consequently to communicating externally, sustainability as a criterion in establishing the wage levels of managers and directors. Design/methodology/approach – It was decided to ascertain whether the quality of information regarding sustainability provided in connection with the remuneration policies of listed companies tallies with the general quality of information regarding sustainability provided through companies’ main (obligatory and voluntary) reporting procedures. Findings – The results of this research show that the inconsistency between the information provided in voluntary and obligatory reports (between reports on sustainability and remuneration reports) extends to the levels of information provided in the two types of obligatory report (the reports on remuneration and on management); there is also a discrepancy between the levels of information provided in these reports and the evaluation of that information by an external assessor. Research limitations/implications – One of the limitations of this research is that as the data examined were gleaned from public documents, it is not necessarily an accurate reflection of all the information that firms have at their disposal on questions of sustainability and remuneration policies. The existence of internal documents containing other information, and therefore leading to different results, cannot be ruled out. Originality/value – This study is the first in Italy to examine the question of how limited companies report issues relating to management by objectives-corporate social responsibility. It does this through the introduction of a mixed system for ESG information, which counteracts the subjective limitations of the internal evaluation provided by the research group by adding in the authoritative evaluations of an external assessor.

Diversity of Board of Directors and Environmental Social Governance: Evidence from Italian Listed Companies

“…Table indicates that the variation score of ESG in our sample is moderate and the average ESG trend is downward, decreasing over time. This result confirms that emphasis on sustainability is not deeply rooted in the Italian business culture (Mio et al, ). Therefore, CSR disclosure can be improved by Italian firms to create a better ethical culture and to reduce the legitimacy gap (Cho & Patten, ; Galbreath, ).…”

Stakeholder Engagement: An Evaluation of European Banks

“…The set of indicators extrapolated from Bloomberg's ESG database took into account all the information that the firms communicated in 2014 using obligatory and voluntary reporting tools for ESG issues. The indicators were the environmental, social, governance, and ESG disclosure scores (Mio et al ., ). Unlike the present research, the ESG score assessed non‐financial disclosures from the perspective of an external assessor.…”

The influence of social disclosure on the relationship between Corporate Financial Performance and Corporate Social Performance*

“…e initial studies focused on identifying the stage of CSP disclosure, its relationship with strategy, and a description, observation, and critical evaluation of disclosure practices (Bowman & Haire, 1976;Brockho , 1979;Dierkes, 1979;Guthrie & Parker, 1989;Preston, 1981;Schreuder, 1979;Ullmann, 1979). e studies subsequently addressed the relationship between disclosure and di erent motivating factors, such as stakeholder power and pressure, culture, reputation, and corporate governance mechanisms, among others (Bayoud & Kavanagh, 2012;Mio, Venturelli & Leopizzi, 2015;Haji, 2012;Li, Luo, Wang & Wu, 2013; Van der Laan, Adhikari & Tondkar, 2005). D-CSP is one of the ways for an organization to seek legitimacy in its actions and can be considered as an instrument for making social performance visible to stakeholders.…”