In this research, we empirically investigate the impact of the board's female representation on corporate financial and sustainability performance after the introduction of the minimum gender quotas in Italy in 2011 (Golfo‐Mosca Law). We studied the 40 companies of the FTSE‐MIB index for 3 years 2016–2018. Using yearly regression analysis, pooled analysis, and differential analysis, we find that the female involvement on both boards has almost no significant effect on the financial performance; however, a significant association is found with the corporate sustainability performance. The robustness checks using differential analysis confirm the later relationship in which firms that improved female representation had also an ethical score upgrade. Interestingly, we also provide that there is an optimal level of gender quotas that maximizes sustainability performance and beyond that, a negative impact on performance might be detected.

In the article, we provide an original linkage between the corporate environmental, social, and governance (ESG) rating and the cost of internal control system (ICSC) stemmed from two closely related frameworks: the 2017 CoSO Framework, which calls to strengthen internal control systems to integrate ESG issues, and the EU directive on nonfinancial reporting (2014/95/EU) that entered into force in 2017. Thus, we evaluate both introductions showing ESG integration in the internal control activities. We cover firms listed on Milan Exchange from 2016 to 2019, providing a thorough analysis with robustness tests. The findings imply that firms should consider both ESG rating and the internal control system cost as strategic corporate tools for value enhancement; therefore, companies should allocate the resources appropriately to internal control activities to incorporate ESG issues and create value since internal control provides the first assurance for ESG integration. The limitations of this study pave the way for further research directions; incorporating the new amendment of the EU directive on nonfinancial disclosure, allowing for a better valuation creation assessment; and whether there is a substitution between sustainability performance and other corporate issues such as taxes and marketing expenditure.

In today's interrelated economies, financial information travel at speed of light to reach investors around the globe. Global financial markets experience regular shocks that transmit negative waves to other equity markets and different asset classes. Given the unique characteristics of exchange-traded funds (ETFs), this paper examines how different ETFs that are traded on London Financial center reacted to the Brexit event in 23 June 2016. The unexpected referendum result the day after is viewed as the next significant financial event since 2008. The paper employs an event study market model on daily and abnormal returns of the selected ETFs with respect to FTSE 250 around the event date. Contrary to what is expected, the world equities fund experienced significant positive abnormal return on the event day. Emerging markets again proved to be a preferred investment destination in times of financial turmoil; the emerging equities fund gained 3% while enjoying an 11.5% positive significant abnormal returns. The US T-Bond fund recorded a 9% return with a significant 7.2% abnormal return. The gold fund soared as much as 4% as investors seeks refuge from Brexit, and the oil fund retraced 1% amid concerns of slowing global demand.

Going public (or initial public offering IPO) is a corporate strategic decision for value enhancement. Underpricing is a phenomenon related to going public and has been studied from a purely financial perspective. In this paper, we investigate whether underpricing incorporates sustainability performance pre-IPO by establishing an original linkage between underpricing and ESG factors before the firm's listing on stock markets. Using informational asymmetries and quality signaling frameworks, we track the journey of going public by Italian Small Medium Enterprises (SMEs) from 2009 to 2017 and show how sustainability issues are incorporated into the IPO underpricing.We demonstrate that underpricing is strongly related to financial and sustainability variables only in the year just before the IPO, indicating better informational efficiency, quality signaling, and image-improving practice. The post-IPO stock return is less correlated with the firm's financial and ESG variables, suggesting that markets can incorporate such information into stock returns in the long run. This paper provides novel insights by delivering an original linkage between a firm's public listing attributes and sustainability performance, offering a temporal tracking of the SMEs before and after the IPO, emphasizing the role of sustainability in the IPO process.

No abstract