Performance and (non) mandatory disclosure: the moderating role of the Directive 2014/95/EU

Cupertino, Sebastiano; Vitale, Gianluca; Ruggiero, Pasquale

doi:10.1108/jaar-04-2021-0115

Cited by 18 publications

(31 citation statements)

References 42 publications

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“…Fonseka et al ., 2019) which found that mandatory environmental disclosure reduces the Cost of Debt . Our findings also expand those of Cupertino et al . (2022a) that found no evidence about the relationship between mandatory non-financial disclosure and the Cost of Debt .…”

Section: Discussionsupporting

confidence: 92%

“…In the light of the evidence presented in the previous section, we found that, in contrast with Cupertino et al (2022a) and Goel (2021), non-financial disclosure regulation had a positive effect on operating profitability and shareholders' returns. An explanation of this result can be that the regulation obliged companies to be transparent about their internal practices, reducing information asymmetries.…”

Section: Discussionsupporting

confidence: 51%

“…Jayaraman and Wu, 2019). In particular, a mandatory disclosure can generate direct and indirect effects that can positively or negatively affect business performance (Cupertino et al ., 2022a).…”

Section: Introductionmentioning

confidence: 99%

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The effects of mandatory non-financial reporting on financial performance. A multidimensional investigation on global agri-food companies

Vitale

Cupertino

Riccaboni

2023

BFJ

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PurposeFocusing on the Agri-Food and Beverage sector, the paper investigates the direct effect of worldwide mandatory non-financial disclosure on several financial dimensions as well as its moderating effects on the relationship between sustainability and financial performance.Design/methodology/approachThe authors performed fixed-effect regressions on a sample of 180 global listed companies, considering a period of eight years. The authors also tested the moderating effects of non-financial disclosure regulation on the relationship between sustainability and financial performance.Findings The authors found a positive direct impact of mandatory non-financial disclosure on Operating Return on Asset, Return on Equity and Return on Sales. The analysis also highlighted the negative moderating effects of non-financial reporting regulation on the relationship between sustainability issues and financial performance. As for the Cost of Debt, the authors found mixed results.Research limitations/implicationsThis study considers a short-term perspective focusing on a limited sample composed of companies playing a key role in the global agri-food system.Practical implicationsThe paper identifies which financial performance dimensions are positively or negatively affected by mandatory non-financial disclosure. Accordingly, managers can rearrange corporate activities to deal with further reporting normative requirements concurrently preserving financial performances and fostering corporate sustainability.Social implicationsThis study recommends fostering mandatory non-financial disclosure to increase corporate transparency fostering the sustainability transition of the Agri-Food and Beverage industry.Originality/valueThe paper highlights global mandatory non-financial disclosure effects on financial performance considering a sector that is cross-cutting impactful on plural sustainability issues.

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Section: Discussionsupporting

confidence: 92%

Section: Discussionsupporting

confidence: 51%

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The effects of mandatory non-financial reporting on financial performance. A multidimensional investigation on global agri-food companies

Vitale

Cupertino

Riccaboni

2023

BFJ

Self Cite

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“…The dependent variable – non-financial performance – is proxied by the average ESG performance of the sample firms. The choice of using ESG scores to depict non-financial performance is consistent with the main stream of literature (Bodhanwala and Bodhanwala, 2021; Chairani and Siregar, 2021; Cupertino and Vitale, 2022). The ESG data were retrieved from the Refinitiv Eikon database, which is considered one of the leading global ESG databases (Cheng et al , 2014; Faizul, 2017; Qiu et al , 2016).…”

Section: Methodsmentioning

confidence: 99%

Does sustainability in executive remuneration matter? The moderating effect of Italian firms’ corporate governance characteristics

Almici

2023

MEDAR

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Purpose This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance characteristics enhance the relationship between sustainability compensation and firms’ non-financial performance and to expand the domain of the impact of sustainability on non-financial performance. Design/methodology/approach This analysis is based on a sample of companies listed on the Milan Italian Stock Exchange from the Financial Times Milan Stock Exchange Index over the 2016–2020 period. Regression analysis was used by using data retrieved from the Refinitiv Eikon database and the sample firms’ remuneration reports. Findings The findings of this paper show that embedding sustainability in executive compensation positively affects firms’ non-financial performance. The results of this paper also reveal that specific corporate governance features can improve the impact of sustainability on non-financial performance. Research limitations/implications This analysis is limited to Italian firms included in the Financial Times Milan Stock Exchange Index; however, the findings are highly significant. Practical implications The findings provide regulators with useful insights for considering the integration of sustainability goals into executive remuneration. Another implication is that policymakers should require – at least – listed firms to fulfil specific corporate governance structural requirements. Finally, the findings can provide investors and financial analysts with a greater awareness of the role played by executive remuneration in the long-term value-creation process. Originality/value This paper contributes to addressing the relationship among sustainability, remuneration and non-financial disclosure, drawing on the stakeholder–agency theoretical framework and focusing on Italian firms. This issue has received limited attention with controversial results in the literature.

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“…Performance and (non) mandatory disclosure: the moderating role of the Directive 2014/95/EU Cupertino et al (2022) shed light on how Directive 2014/95/EU affects financial performance as well as its moderation effect on the relationship between financial and non-financial performance. The authors argued that non-financial regulation negatively affects firms' operating profitability and shareholder value while produces no effects on debtholders' returns.…”

Section: Integrated Reporting Quality and Cost Of Debt Financingmentioning

confidence: 99%

Guest editorial Rethinking non-financial reporting in Europe: challenges and opportunities in revising Directive 2014/95/EU

Venturelli

Fasan

Pizzi

2022

JAAR

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Performance and (non) mandatory disclosure: the moderating role of the Directive 2014/95/EU

Cited by 18 publications

References 42 publications

The effects of mandatory non-financial reporting on financial performance. A multidimensional investigation on global agri-food companies

The effects of mandatory non-financial reporting on financial performance. A multidimensional investigation on global agri-food companies

Does sustainability in executive remuneration matter? The moderating effect of Italian firms’ corporate governance characteristics

Guest editorial Rethinking non-financial reporting in Europe: challenges and opportunities in revising Directive 2014/95/EU

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