The aim of this study is to examine whether the European Union (EU) Directive on Non‐Financial Information (NFI) would be capable of increasing corporate transparency and sustainable development. To this end, the study reports the findings of 17 interviews with preparers and auditors about the content and reporting methods of NFI, as specified by the Italian regulation. The study finds that preparers and auditors favour many of the requirements introduced by the Italian legislature. In particular, the board's responsibility for NFI, the flexibility in the content and in the reporting method, and the audit of non‐financial statements are regarded as a fruitful approach to disciplining NFI. The study contributions are twofold. First, it extends the so far scant literature on the role of EU policy as a change agent for sustainable development. Second, the study identifies some features of the Italian regulation that may be regarded as fruitful ways to regulate NFI.

The numerous cases of business disruptions, involving opportunism and accounting fraud by shareholder, directors and managers, that have occurred in different countries over the past two decades along with institutional and context phenomena and with the rise of the 2008 financial crisis, have refocused the attention of academia, professionals and world policy makers on the disclosure processes used by companies and on corporate governance mechanisms. This paper, after a systematic description of the investigated issues – ownership structure, ownership concentrations and largest shareholders examines the relationship between ownership structure or concentrated ownership and earnings management in the Italian context, characterized by concentrated ownership and the dominance of the largest shareholder who exercises typically significant influences on management decisions directly or indirectly. Existing literature suggests, in an unequivocal way, the effect of the ownership structure on earnings management. According to some researchers, the ownership structure decreases the incentive to manage earnings. Others have the opposite opinion, they think ownership structure on earnings management provides the opportunity and incentive to manipulate earnings. Therefore, the main purpose of this paper is to analyse whether, in the Italian context, a firm’s ownership structure, measured with several variables, exacerbates or alleviates earnings management. Using a sample of 300 non-financial listed Italian firms from 2011 to 2013. We find that discretionary accruals, as a proxy for earnings management, is negatively related to ownership concentration and the second largest shareholder and positively related to first largest shareholder. The study’s results suggest that ownership concentration improve the quality of annual earnings, in a particular agency setting, by reducing the levels of earnings management.

Purpose To determine whether to entrust the European Union (EU) to create a new nonfinancial reporting framework or endorse the extant reporting framework developed by the Global Reporting Initiative (GRI), this study aims to explore whether the mandatory implementation of the EU Directive positively impacted the GRI-based environmental disclosure. Design/methodology/approach The authors compared the pre- and post-EU Directive environmental disclosure of 16 Italian environmentally sensitive companies. The authors used an extended coding scheme and developed a unique scoring system to compare the quantitative and qualitative changes in environmental disclosure. Findings The analysis showed that the quantity of environmental disclosure increased after the mandatory EU Directive adoption. The most significant change was observed regarding the disclosure topics explicitly required by the Italian legislature. Additionally, disclosure of soft information continued to prevail over that of hard information in the post-Directive period. While the Directive boosted the level of adherence to GRI standards, Italian companies disclosed information that could be easily mimicked (soft) instead of objective measures that could be verified (hard). In light of this evidence, the endorsement of extant GRI standards could be a valuable option for enhancing the comparability and transparency of environmental disclosure. Originality/value This study used an original extended coding system and proposed related environmental disclosure indexes that allow monitoring changes in environmental disclosure over time. To the authors’ best knowledge, this study is one of the few that justifies the significant impact of regulation (here the EU Directive) on the increase in environmental disclosure and that uses hard and soft information typology to examine the quality of environmental disclosure.