Gobierno corporativo y prácticas empresariales alineadas a los Objetivos de Desarrollo Sostenible (ODS), el rol de las pymes, la innovación y la tecnología en la Agenda 2030, y políticas públicas nacionales y regionales para incentivar la sostenibilidad fueron algunos de los temas que expertos del ámbito empresarial, académico y político trataron en la I Conferencia Iberoamericana sobre Desarrollo Sostenible, organizada por la Cátedra AECA en la Universidad ORT Uruguay.
Post Exam Fun(da) Intra UEM General Quiz - Finals.pdf
Di Pietra - Conferencia ODS
1. Roberto Di Pietra
Department of Business and Law
University of Siena
CG mechanisms and Corporate Social
Responsibility:
Are Good CG practices related to CSR
actions and disclosure?
I Conferencia Iberoamericana sobre Desarrollo Sostenible
Cátedra AECA Carlos Cubillo de Contabilidad y Auditoría
Capitulo Iberoamericano
29-30 Noviembre, 2018 – Universidad ORT Uruguay, Facultad de
Administración y Ciencias Sociales – Montevideo, Uruguay
2. Premise
• Some reflections and suggestions arising from:
CSR reports and CG mechanisms
Article titled: Corporate Governance mechanisms
as drivers that enhance the credibility and
usefulness of CSR disclosure
Article published in 2018 on the Journal of
Management and Governance (co-author: Maria
del Mar Miras Rodriguez)
CSR reports quality and GRI adoption and
Assurance
Paper titled: Assurance and GRI Adoption: Looking
for Legitimacy or Higher Quality of CSR Reports?
Co-authors: Maria del Mar Miras Rodriguez and
Bernabé Escobar
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3. Agenda
Premise
Introduction
CG mechanisms
CG mechanisms and CSR reports
CG reports quality and GRI adoption
Collecting ideas
Some suggestions
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4. Introduction
• Questions
Why a company should have to
develop CSR action?
Why a company should have to
provide disclosure about such
activities?
Why a company needs to structure
a CG system?
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5. Introduction
• Main approach
What could we learn from the existing
literature on CG mechanisms and
CSR?
Recent studies could provide us
relevant idea on the relationship
between CG mechanisms and CSR
In particular, some findings arising from the
practices adopted in different countries,
could represent best practices to be
considered
Recent regulations within EU have
imposed the mandatory preparation
of CSR reports
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6. Introduction
• A starting point
Sustainable Development Goal
(SDG) 16 and CG mechanisms
SDG 16 – Promote peaceful and
inclusive societies for
sustainable development, provide
access to justice for all and build
effective, accountable and
inclusive institutions at all levels
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7. Introduction
• A starting point
Sustainable Development Goal (SDG)
16 and CG mechanisms
CG – System of rules, practices and
processes by which a firm is directed and
controlled; Involves balancing the interests
of a company's many stakeholders, such as
shareholders, management, customers,
suppliers, financiers, government and the
community
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8. Introduction
• A starting point
Sustainable Development Goal (SDG) 16
and CG mechanisms
CG is related to the policies and procedures a
company implements to control and protect the
interests of internal and external business
stakeholders
Organizations use Corporate Governance
mechanisms to manage their businesses
because of their size and complexity
Good CG mechanisms in action could
contribute to the achievement of the SDG 16
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9. CG mechanisms
• CG mechanisms
When CG is Good?
Academics and Practitioners
agree the idea that CG is able to
generate positive effects when it
is able to induce: Accountability,
Efficiency, Effectiveness, Rules
and Law compliance
but also
Transparency, Responsiveness,
Consensus, Participation,
Equitability, Inclusiveness
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10. CG mechanisms
• Levels of CG mechanisms
Several studies have considered the role of
specific CG mechanisms (e.g. Jain Jamali,
2016)
Three levels
Institutional
Firm
Group
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11. CG mechanisms
• Institutional Level of CG mechanisms
Companies are pressured by the
environment in which they compete to adopt
certain CSR actions and disclosure
These choice is needed if they want to be
able to compete in the market
At the same time, the Institutional
environment in which each company is
operating determines the CG mechanisms
(soft versus hard rules)
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12. CG mechanisms
• Institutional Level of CG mechanisms
The institutional level CG mechanisms
operate through two “visions” on the reality
Institutional (theory)
A continuous adaptation of the companies
structure and policies to the institutional norms
and cultural context
An imitative strategy on of the successful
behavior or practices carried out by their peer
organizations
Legitimacy (theory)
A response to changes in social awareness
A reaction to environment pressures
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13. CG mechanisms
• Firm Level of CG mechanisms
BoD has to develop monitoring and advisors
roles as a solution for the conflicts of
interest between Shareholders and
Managers (Agency Theory)
How this conflict is solved or the search for
an equilibrium in this conflict could affect
how the CSR actions are carried out
assuming the prevalence of a long term
versus a short term perspective
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14. CG mechanisms
• Firm Level of CG mechanisms
Long term perspective is related to the
presence of a Reference Shareholder (RS)
RS is related to the awareness about the
negative consequences descending from a not
socially responsible perception
Managers on BoD could have an effect on
CSR decisions
Managers could perceive that behind CSR
actions there is a way to assess their decisions
and that through the CSR disclosure they are
controlled
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15. CG mechanisms
• Group Level of CG mechanisms
Good management arguments support the
idea that group level of CG mechanisms
could affect CSR decisions
More Effective Boards are those which take the
best decisions (including CSR actions) and these
increase the financial performance
The Board Effectiveness is a concept hard
to define
Different factors usually considered (proxy):
Board size
Independent directors on the BoD
Diversity of BoD members (gender; nationality)
CSR Committee
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16. CG mechanisms
• Group Level of CG mechanisms
Board size
The smaller is the sixe of the BoD the more effective are its
activities including the need to carry out CSR actions and
disclosure
The smaller number of Board members contributes to reducing
problems of communication and coordination
In the literature this is not a shared opinion (the larger is the
BoD size, the greater is its capacity to manage the
complexity of the company)
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17. CG mechanisms
• Group Level of CG mechanisms
Independent directors on the BoD
The presence of independent directors on the
BoD is positively related with CSR actions and
disclosure
This is due to the fact that independent directors
are less influenced by managers and more
interested to protect the minority shareholders
In the literature this is not a shared opinion
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18. CG mechanisms
• Group Level of CG mechanisms
Diversity of BoD members
This factor could positively influence a
company’s capacity to improve its decisions,
including CSR actions and disclosure
The diversity factor includes the gender and
nationality of BoD members
The greater is the number of female directors, the
higher is the interest to CSR actions and
disclosure
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19. CG mechanisms
• Group Level of CG mechanisms
CSR Committee
The establishment of a CSR Committee within
the BoD is a factor positively related to CSR
actions and disclosure
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20. CG mechanisms and
CSR reports
• Aim of the first study (published on JMG 2018)
Examine what kind of CG mechanisms are
driving getting a GRI application level, like
CSR disclosure decisions linked with
credibility and usefulness of the information
disclosed (in the particular case of energy
companies)
Sample
CSR reports prepared and presented by listed
companies in the energy industry
Period 2012-2014 (before the adoption within EU
of Directive 95)
176 Listed companies in 33 countries
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21. CG mechanisms and
CSR reports
• Hypothesis
Three levels of CG mechanisms
Institutional level
1 The decision of following GRI guidelines to
prepare the report is explained by Institutional
level CG mechanisms
Firm level
2 The decision of following GRI guidelines to
prepare the report is explained by Firm level
CG mechanisms
Group level
3 The decision of following GRI guidelines to
prepare the report is explained by Group level
CG mechanisms
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22. CG mechanisms and
CSR reports
• Findings
65% got a GRI application level
Board size: 11 Directors; of which 56%
Independent; 13% women; 36% insiders
directors
86% companies have created a CSR
Committee
29% companies have a Reference
shareholder
Report length in average 102 pages;
14% reports were prepared on a
mandatory basis
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23. CG mechanisms and
CSR reports
• Findings
CSR disclosure practices significantly
related to the Firm and Group level of CG
mechanisms (Board size; independent
Directors and the Existence of a Reference
shareholders)
CSR disclosure practices significantly
related with the adoption GRI guidelines
CSR quality negatively related to reports
prepared on a mandatory basis
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24. CSR reports and
CG mechanisms
• What did we learn?
Energy companies need to increase the credibility
of the CSR report and to legitimate themselves to
their stakeholders
This is particularly true in the case of Energy
companies with a Reference Shareholder
The enhancement of credibility and the usefulness
of the information reported is essential for energy
companies, since they need to legitimate
themselves due to the high environmental impact of
their activities
Otherwise their CSR commitments couldn’t be
perceived by stakeholders, and all the effort will be
not worthy
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25. CSR reports quality and
GRI Adoption
• Aim of the second study
Examine whether the GRI adoption really have an
impact on the quality of CSR reports, or is merely
seen as an attempt to gain market legitimacy
According to the recent KPMG report (2017) around
75% of the companies prepare a CSR report
It is assumed that these practice is improving the
reports’ quality
Sample
CSR reports prepared and presented by listed
companies in the energy industry (Industry key factor
in the quality of the CSR reports)
Period 2012-2014
185 sustainability reports from 35 countries
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26. CSR reports quality and
GRI Adoption
• Hypothesis
GRI adoption: the adoption of GRI
guidelines is an important driver to
enhance the quality of CSR/sustainability
reports
Adopting GRI has positive impact on the
CSR Reports Quality
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27. CSR reports quality and
GRI Adoption
• Findings
The average size of the board is around 11 directors
(56% are independent). Most energy companies (85%)
have a CSR Committee. CSR reporting is mandatory for
72% of the companies
GRI adoption is positively related to the board size, the
existence of a CSR Committee, and the length of the
report
The higher the percentage of independent directors is,
the greater the probability that there is a CSR Committee
It is remarkable that mandatory CSR report is
negatively correlated to the adoption of GRI guidelines
No significant relationship between GRI guidelines and
CSRRQ
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28. CSR reports quality and
GRI Adoption
• What did we learn?
The decision to adopt GRI guidelines has no visible
effect on Quality
Adopting GRI guidelines is a good first step for
companies wishing to report their CSR (comparison
and harmonization), but that they will need to go
further if they want to achieve high quality and
credible CSR reports
Important for companies to be careful about the
CSRRQ and make real efforts in this respect, as the
reports’ utility becomes questionable if they are
perceived by investors and stakeholders as
lacking credibility or being unreliable
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29. CSR reports quality and
GRI Adoption
• CSR examples of best practices
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Eni Sustainability report 2017
SDGs
Assurance
GRI Adoption
30. CSR reports quality and
GRI Adoption
• CSR examples of best practices
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Monnalisa Annual Report 2016
No Assurance service
GRI Adoption
31. CSR reports quality and
GRI Adoption
• CSR examples of best practices
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Vivida & Partners Sustainability report 2017
Assurance GRI Adoption
Awarded in 2017 as the best Sustainability report
SDGs
32. Collecting Ideas
• What did we learn?
CSR actions and disclosure are pressured
by environmental factors
Good CG mechanisms induce the
companies to adopt rules, procedures,
processes consistent with the adoption of
CSR actions and disclosure
Good CG mechanisms are consistent with
SDG 16
• Promote peaceful and inclusive societies for
sustainable development, provide access to
justice for all and build effective, accountable
and inclusive institutions at all levels
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33. Collecting Ideas
• What did we learn?
Searching for legitimacy is a way to
increase the credibility of CSR actions and to
increase the credibility of CSR disclosure
The Adoption of GRI guidelines is not
necessarily linked with the quality of CSR
reports
• Therefore companies have to pay much more
efforts to increase the reliability and credibility of
these reports through substantial actions in
CSR area
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34. Some suggestions
• Literature findings suggest that:
The creation of a well structured set of CG
mechanisms could contribute positively on
the policies adopted in CSR field and their
disclosure
CSR committee
Independent Directors
Board size
Diversity
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35. Some suggestions
• Literature findings suggest that:
Good Governance systems are useful to
support the business performance
CSR actions is a convincing strategic
action to react on a competitive market
CSR disclosure has to be enough reliable
and credible to disclosure CSR actions
CSR reports prepared on a mandatory
basis increase in credibility but not
necessarily in reliability
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36. María del Mar Miras Rodríguez (University of Seville; mmiras@us.es)
Roberto Di Pietra (University of Siena; dipietra@unisi.it)
CG mechanisms and Corporate Social
Responsibility
Good CG practices and CSR actions
THANK YOU FOR YOUR ATTENTION !!!