Alain Devalle

The Quality of Mandatory Disclosure: the Impairment of Goodwill. An Empirical Analysis of European Listed Companies

Abstract The paper presents the results of an empirical analysis on the quality of the mandatory disclosure of IAS 36 – impairment of assets. The analysis focuses, in particular, on the disclosure of goodwill. The aim of the paper is to verify if companies disclose the information required by IFRS on the impairment of goodwill. The international financial crisis has lead many companies to recognize impairment losses on goodwill or to verify twice (or more) a year whether impairment losses were generated. The increasing relevance assumed by goodwill in the financial statement of companies has led disclosure to become an extremely important issue. IAS 36 defines that companies shall disclose, among others, the carrying amount of goodwill allocated to the cash generating unit (CGU), the basis on which the units recoverable amount has been determined, the discount rate applied to the cash flow projections, etc. Many studies have been conducted on the quality of voluntary disclosure of impairment and the results show that the disclosure index is very low. Thus, our paper aims at verifying if, first of all, the mandatory disclosure is shown in the notes of the consolidated financial statement. Consequently, an empirical analysis was carried out of the consolidated financial statements of the groups listed on the Italian, French, German and Spanish Stock Exchanges and belonging to the main indexes of the above-mentioned markets (FTSEMIB40, CAC40, DAX30, IBEX35). The sample is made up of 141 consolidated financial statements referring to the year 2010. The methodology of research is based on the use of the disclosure index ( Botosan, 1997 ). The results are surprising: they show that the disclosure index is very low and there are wide differences between the stock markets analyzed. A question arises from the evidence: why is the quality of mandatory disclosure so poor? Standard setters, practitioners and academics must deal with this topic.

Place-based network organizations and embedded entrepreneurial learning: Emerging paths to sustainability

Purpose The purpose of this paper is to develop an original six-phase model describing entrepreneurial learning in the transition of place-based enterprises toward a sustainable exploitation of natural common resources (commons). Design/methodology/approach The six-phase model proposed by this study explains the learning processes involving place-based enterprises through two important existing theories: adaptive co-management and Lachmann’s evolutionary, embedded theory of entrepreneurship. The proposed model integrates these two theories on the basis of a longitudinal case study on the fishing enterprises in an Italian marine protected area (MPA). Findings In the case study, the success factors identified by the adaptive co-management literature proved important in enabling an embedded entrepreneurial learning process consistent with Lachmann’s view. The case analysis allowed the authors to cluster these learning processes around six phases. Further, even if traditional fishing is not knowledge-intensive, this case shows the transition to a sustainable business model required intense efforts of educated institutional work and scientific research. Interestingly, the key learning processes were enabled by the emergence of a larger, networked social entity (a network form of organization) including the community of fishermen, the MPA management and a network of scientists studying the marine area ecosystem. Research limitations/implications This study is explorative and relies on a single case study. Despite this limitation, it opens up new research paths in the fields of entrepreneurship, institutional work, network organizations and adaptive management of the commons. Originality/value This study is strongly interdisciplinary; it proposes an original model based on a theoretical view that is highly innovative for organization and management studies; and addresses a relevant but overlooked issue with important societal implications.

Is the "new" parmalat model of corporate governance a best practice in Italy?

Abstract This paper presents an analysis of corporate governance of the “new” Parmalat, born in the aftermath of the infamous financial scandal, and aims at verifying if this new model of governance can be considered a best practice for Italian listed companies. Many papers have already highlighted that the Parmalat scandal was facilitated by bad governance which did not have an efficient system for the safeguarding of creditors and minority shareholders in presence of a family corporation. This paper presents the results of the comparison between the “old” and “new” rules of Parmalat corporate governance, highlighting the considerable differences in the composition and functions of the various company bodies. Moreover, an in-depth analysis of the efficacy of the external and internal control systems is also provided. The main points of strength which make it possible to consider the new Parmalat as a model of best practice in Italy are identified, although critical aspects are also pointed out. The paper concludes by making suggestions aimed at strengthening the model of corporate governance of Italian listed companies.

Business School Innovation Through a Service Science Approach: Organizational and Performance Measurement Issues

In many cases, there is a serious gap between the needs of real-world organizations and the skills that business school graduates actually develop during their studies. In order to close this gap, innovative pedagogic solutions can be implemented in business schools, such as hands-on, work-group information systems courses; but such changes may imply serious budget and organizational problems, also because of the inertial nature of university institutions. Service science is emerging as a very promising approach to tackle the challenges implied in such practice-oriented, demand-driven innovation of educational services. In this paper, we apply a service science approach to propose a bottom-up re-design of the educational service system in a representative case: the School of Management and Economics of the university of Turin, Italy. We identify the network of stakeholders and propose a model in which students, graduates and firms interested in hiring specialized personnel play an active role in co-creating the value delivered by the university educational services. Finally, we outline the main performance measurement and organizational issues implied by this project.

Corporate governance and financial performance for engaging socially and environmentally responsible practices

Purpose This paper aims to reconcile the conflicting understanding on the nexus between corporate governance (CG), corporate financial performance (CFP) and corporate social responsibility (CSR) by investigating how companies engage with CSR practices. Design/methodology/approach The study carries out a multivariate linear regression analysis on a sample of 361 listed companies from five countries in Europe: France, Germany, Italy, Spain and the UK. Findings CG mechanisms and CFP have an impact on CSR because they affect social and environmental practices strongly and significantly. Furthermore, the findings describe the capacity of CSR to influence both the CG structure and the CFP. Research limitations/implications The present research limits the analysis on the social and environmental performance of companies that communicate their commitment to stakeholders without distinguishing between “greenwashing” companies that implement CSR to improve corporate reputation and those companies that pursue effective societal benefits, taking care of stakeholder relationships. Practical implications The CSR approach can drive the CG structure and improve CFP if managers perceive the implementation of sustainable practices as an integrated process rather than a mere outcome. Originality/value This paper seeks to disentangle the nexus between CG, CFP and CSR, not yet precisely defined by scholars in the context of five countries in Europe.

The determinants of the quality of mandatory disclosure of intangible assets under IFRS

Disclosure is an important topic in financial statement analysis. This paper analyzed 4.950 items of mandatory disclosure of 165 groups listed on the Italian stock exchange and belonging to the FTSE All Share. An OLS regression model was used to define the determinants that influence the mandatory disclosure of intangible assets. Results show that the weight of intangible assets, the size of the company and the return on equity are positively associated to the mandatory disclosure of intangible assets. This research contributes to defining the importance of mandatory disclosure.