Chiara Mio

Accounting and the Development of Management Control in the Cultural Sphere: The Case of the Venice Biennale

Abstract The Venice Biennale, founded in 1893, is situated within the cultural sphere, covering work ranging from art, architecture, dance, music and theatre to cinema (the world-known ‘Venice Film Festival’). Throughout its life, the Biennale has experienced very troubled times, being involved in controversy, as well as undergoing significant legal and organisational changes, in particular, the transition from a public body to private one at the end of the 1990s. Dramatic changes have also affected the accounting data collection system utilised by the Biennale, which has developed from a system concerned with providing information for fulfilling specific legal provisions to one comprising a subsystem which has progressively evolved to aid the corporate strategic decision-making process. This paper critically and systematically reviews the evolution of the accounting system and management control within the Biennale. It will examine how new information requirements over the years have driven the information-accounting system to change and, in turn, how the system has been influenced by the historical setting within which the decisions were made. We also provide some thoughts regarding the future development of such systems.

Management by objectives and corporate social responsibility disclosure: First results from Italy

Purpose - – The purpose of this paper is to examine the relationship between remuneration for the achievement of objectives and sustainability, and – more specifically – the amount of attention that listed companies in Italy devote to defining, and consequently to communicating externally, sustainability as a criterion in establishing the wage levels of managers and directors. Design/methodology/approach - – It was decided to ascertain whether the quality of information regarding sustainability provided in connection with the remuneration policies of listed companies tallies with the general quality of information regarding sustainability provided through companies’ main (obligatory and voluntary) reporting procedures. Findings - – The results of this research show that the inconsistency between the information provided in voluntary and obligatory reports (between reports on sustainability and remuneration reports) extends to the levels of information provided in the two types of obligatory report (the reports on remuneration and on management); there is also a discrepancy between the levels of information provided in these reports and the evaluation of that information by an external assessor. Research limitations/implications - – One of the limitations of this research is that as the data examined were gleaned from public documents, it is not necessarily an accurate reflection of all the information that firms have at their disposal on questions of sustainability and remuneration policies. The existence of internal documents containing other information, and therefore leading to different results, cannot be ruled out. Originality/value - – This study is the first in Italy to examine the question of how limited companies report issues relating to management by objectives-corporate social responsibility. It does this through the introduction of a mixed system for ESG information, which counteracts the subjective limitations of the internal evaluation provided by the research group by adding in the authoritative evaluations of an external assessor.

Owners’ preferences for CEOs characteristics: Did the world change after the global financial crisis?

Purpose The purpose of this paper is to study whether and how owners’ preferences for CEO characteristics changed due to the 2008-2009 global financial crisis. The authors identify three fundamental success factors needed for companies to compete in the after-crisis environment, and the authors connect five CEO characteristics to such factors. Design/methodology/approach The authors rely on a hand-collected database to build a panel data of European CEOs for the 2010-2012 period. Findings The empirical results indicate that after 2009, CEOs of companies that were more severely hit by the crisis are significantly different compared to those of other companies. More specifically, they have a background in science or engineering; they have international experience; and they are remunerated to a higher extent through stock options. The results of this paper also indicate that only international experience had a positive and significant impact on financial performance. Originality/value The paper contributes to the stream of literature on CEO characteristics and owners’ identity, tackling the research theme from a dynamic rather than from a static perspective.

Materiality and Assurance: Building the Link

This chapter provides a comprehensive discussion of materiality and assurance in the context of Integrated Reporting (IR). On the one hand, materiality has gained much importance following the introduction of IR, since one of the main objectives of this innovative form of reporting is to reach conciseness. On the other hand, assurance may play a crucial role in conferring reliability to the materiality determination process proposed by the International Integrated Reporting Council (IIRC) and to the whole process of IR. This chapter provides a discussion of the state of the art of materiality and assurance in the context of non-financial information and, more specifically, IR. It also points out some of the main challenges the IIRC materiality determination process will have to face in order for companies to implement it correctly. Finally, drawing on the peculiarities of IR, the chapter points out some issues that will have to be discussed regarding assurance and its effectiveness. Some insights for future development of the debate are also proposed.

The Case of Enel

The aim of this chapter is to provide a discussion of the business case of Enel, which is an International Integrated Reporting Council (IIRC) pilot program company currently evolving its corporate disclosure towards Integrated Reporting (IR). The relevance of pilot company business cases has been recognized by the IIRC, which defined their experience as “invaluable”. On the one hand, Enel did modify its corporate reporting system coherently with the IIRC guiding principles by including considerable non-financial information in its annual report, reducing the length of its sustainability report and improving its materiality determination process and business model analysis. On the other hand, it will be interesting to see how the company applies other aspects of the IIRC framework, such as the six-capital structure and the way in which reporting boundaries are defined. The analysis done in this chapter may be of interest to companies, standard setters and scholars wishing to enhance their knowledge on how companies are currently evolving their corporate disclosure systems towards IR.

Sustainability indicators for university ranking

The main aim of this contribution is to investigate the possibility to include sustainability among the performance features that can be taken into consideration by university rankings. To this aim we propose a set of well-defined sustainability indicators related to different aspects of sustainability. Today the mission of a University can hardly be reduced to simply teaching and research. A University should contribute to building a new and improved society, and as such, it must be a visionary center of sustainability, innovation, and excellence, disseminating values and the well-being of society. Within this framework, sustainability has to be integrated into everyday activities. Within the University framework sustainability is often identified with environmental sciences; on the contrary, it is a pervasive interdisciplinary issue entailing a number of different issues. While one specific university ranking (The GreenMetric) has adopted a ranking criterion fully hinging on sustainability indicators, none of the main global rankings have so far addressed the issue. Both in terms of good practice assessments, and as an important signal to the society as a whole, the introduction of sustainability in global rankings could be an important addition to the existing metrics, and a significant dimension of comparison. Among all different aspects of sustainability, those considered here are of three different kinds: the environmental (or green) sustainability; the social sustainability; the relation with the local community. Within this framework, we propose a set of sustainable indicators, deeply rooted in the relevant scientific literature, easily measurable, and sufficiently flexible, to be selectively included in different rankings.

IR: The Big Promise and the Expectation Gap

This chapter will discuss the expectation gaps generated by Integrated Reporting (IR) and, more broadly, the motivations that pushed companies towards IR, the difficulties in its implementation process, and finally its possible benefits. Empirical evidence was gathered through questionnaires distributed to Italian companies and investors. The results of our analysis suggest that companies generally reported some kind of benefit deriving from IR implementation; conversely, investors are not fully satisfied with the way Italian companies are implementing IR. The divergent views between companies and investors suggest that IR has already provided companies with some “internal” benefits, in terms of better internal strategy communication and improvement in integrated thinking. Nevertheless, “external” benefits, in terms of external disclosure, are yet to be achieved, thus generating an investor expectation gap.

Institutional Determinants of IR Disclosure Quality

The aim of this chapter is to study whether and how the institutional context where a company operates influences Integrated Reporting (IR) disclosure quality, as measured through a unique hand-collected dataset. Our results show strong empirical support for the hypothesis that a country’s institutional characteristics significantly shape IR disclosure quality. In particular, we find that disclosure quality is higher in civil law countries and in countries with higher employee protection, levels of market coordination, ownership concentration, education, density of trade unions, corporate social responsibility and economic development. Conversely, the higher the investor protection, the lower the IR disclosure quality. These results allow us to draw new insights on the nature of IR and its relationship with institutional contexts.

Integrated Reporting: The IIRC Framework

The International Integrated Reporting Council (IIRC) Framework is arguably the most important guide for companies willing to implement Integrated Reporting (IR). This chapter offers a review and discussion of the most important guiding principles and content elements that are the backbone of the IIRC Framework. It also compares the Framework with the main sustainability reporting standard, the Global Reporting Initiative (GRI) Guidelines. Following such a comparison, we argue that IR can be seen as an evolution of financial reporting rather than as sustainability reporting. Finally, the chapter discusses some of the most critical aspects of the IIRC Framework, such as its approach towards materiality and capitals.

The Impact of Independent Directors on Organizational Effectiveness in Monetary and In-Kind Stakeholder Dialogue Museums

This study investigates the issue of stakeholder dialogue in the context of art museums. We propose and empirically test the existence of two different kinds of stakeholder dialogue: monetary and in-kind. By relying on a sample of 70 US art museums during the 2007–2010 period, we show that high monetary and high in-kind stakeholder dialogue museums are significantly different. In particular, we test the impact of the number of independent directors on fundraising activity and board monitoring. We find that a higher number of independent directors leads both to better monitoring and to improved fundraising activity, with the effect being stronger for monetary stakeholder dialogue museums.