Approaching public sector transparency through an integrated reporting benchmark

Abstract

Purpose This paper aims to investigate whether the key items encompassed in the new reporting trends are addressed in the current reporting set and, also, whether there are certain patterns regarding disclosure practices across a sample of reporting entities. Design/methodology/approach The research methodology takes into consideration both the financial and non-financial elements from the entities’ activities and embeds them in the analysis, in a more holistic frame offered by integrated reporting. The disclosure level is investigated using the six-tier capital model from the International Integrated Reporting Council Framework and the eight major principles from GRI guidelines. Furthermore, the cluster analysis is used to identify the disclosure practices patterns within some European Union local public administrations. Findings The level of disclosure within the analyzed entities is relatively high. Also, the results of the cluster analysis reveal some disclosure patterns, especially regarding the Anglo-Saxon and Northern local public administrations, the municipalities with the highest degree of disclosure of the sample. Research limitations/implications The most significant limitations are represented by the sample of municipalities, the language filter and the fact that only one-year data were considered for analysis. Practical implications The study can be useful to any other institutions under the dome of the public sector, willing to enhance public accountability throughout greater transparency. Also, it might help the public managers to outline a long-term development plan about how to create value and to whom, material issues, risks and strategy through the integrated reporting, a cornerstone for future changes. Moreover, it might also be a subject of interest in the research environment, offering new opportunities for further empirical studies, by applying and testing it in other public organizations. Originality/value The study provides an original assessment tool useful to improving the reporting process. Also, it can be useful to other public institutions that are willing to enhance public accountability throughout greater transparency.

Integrated thinking in the integrated reports of public sector companies. Evidence and contextual factors

“…Public entities must demonstrate to citizens the value they generate in the provisions of their services in the absence of a clear measure of value that connects performance and the results desired by stakeholders (Moore, 2014). In this context, non-financial information takes centre stage (Farneti and Guthrie, 2009; Guthrie et al , 2017; Nistor et al , 2019). Nonetheless, public organisations have difficulties connecting non-financial reporting and the process of creating public value (Tommasetti et al , 2020).…”

“…As authors have already recognised, IR could represent an important development in the reports produced by public organisations (Farneti et al , 2019; Manes-Rossi, 2019; Nistor et al , 2019) and can contribute to the management of public sector activities in several ways. Firstly, the process of creating public value and the use of available resources can be better understood (CIMA, 2016; Montecalvo et al , 2018).…”

“…Firstly, the process of creating public value and the use of available resources can be better understood (CIMA, 2016; Montecalvo et al , 2018). Secondly, it can improve dialogue with stakeholders (Montecalvo et al , 2018; Farneti et al , 2019) and overall transparency (Nistor et al , 2019). Likewise, it can be a mechanism to promote internal change in public sector organisations (Guthrie et al , 2017) or to expand knowledge about the intellectual, social and relational capitals (Melloni, 2015; Casonato et al , 2019; Farneti et al , 2019).…”

“…Integrated thinking can contribute to respond to the greater complexity and diversity in the relationships of public entities with these stakeholders (CIPFA, 2016; Guthrie et al , 2017; Tommasetti et al , 2020). Citizens should be able to see this mindset reflected in the disclosure of information, justifying the use of taxpayer-funded resources (Nistor et al , 2019) and enabling an assessment of the sustainability of public service provision (CIPFA, 2016; Nistor et al , 2019).…”

“…Therefore, an integrated thinking index (ITI) was formulated. The use of indexes is very common for measuring the dissemination and quality of the information provided, especially in the field of non-financial and sustainability information (Manes-Rossi et al , 2018; Nistor et al , 2019). The ITI was calculated by determining the average frequency of the five dimensions.…”