Corporate corruption prevention, sustainable governance and legislation: First exploratory evidence from the Italian scenario

Abstract This paper aims to identify the main issues and drivers of sustainable corporate governance to prevent corruption, analysing the interaction between the principal governance body–Board of Directors–and the implementation and application of corruption prevention plans by pointing out exploratory evidence from the company sample. This paper is built upon two steps. First, the content analysis research method is applied, selecting a sample of Italian companies and analysing information from the corruption prevention plans to establish the role of the Board of Directors in the management of company's system. Second, the level of the implication of Board of Directors in drafting through the identification of the Global Indicator is investigated, measuring the degree of the Board of Directors' involvement and making use of the content analysis's results. Additionally, a linear regression between the Global Indicator, companies dimensional indicator and performance indicators is carried out with the aim to define variables affecting this process. The paper proposes exploratory evidence which shows a deep understanding of the governance body in the construction and application of the corporate corruption prevention plans, taking into consideration crucial information from: the anti-corruption national legislation (Law 190/2012), risk management and organization model (Legislative Decree 231/2001), corporate sustainability and compliance programs adopted by companies. The originality of the findings derives from the need to establish an integrated sustainable corporate governance model directed at preventing corruption. Thus, this paper proposes not only the analysis of the Italian companies' compliance sustainable models to prevent corruption in their corporate governance but shows the path for future research on the topic.

[1]  A. Huberman,et al.  Qualitative Data Analysis: A Methods Sourcebook , 1994 .

[2]  J. Elkington.  Cannibals with Forks , 1997 .

[3]  M. Joshi,et al.  Determinants of corporate social responsibility disclosures: Evidence from India , 2014 .

[4]  Rosa Lombardi,et al.  Systematic errors in decision making processes: the case of the Italian Serie A football championship , 2014, Int. J. Appl. Decis. Sci..

[5]  G. Sarens,et al.  Factors Associated with the Internal Audit Function's Role in Corporate Governance , 2012 .

[6]  M. C. Branco,et al.  Research on corporate social responsibility and disclosure in Portugal , 2011 .

[7]  S. Benn,et al.  Organizational Change for Corporate Sustainability , 2014 .

[8]  Shorey Peterson,et al.  The Modern Corporation and Private Property. , 1933 .

[9]  Separation of Ownership and Control , 1983, The Journal of Law and Economics.

[10]  Chieh-Yu Lin,et al.  Preventing Corporate Corruption: The Role of Corporate Social Responsibility Strategy , 2012 .

[11]  Ruth V. Aguilera.  Corporate Governance and Director Accountability: An Institutional Comparative Perspective , 2005 .

[12]  John W. Meyer,et al.  Institutionalized Organizations: Formal Structure as Myth and Ceremony , 1977, American Journal of Sociology.

[13]  Simona-Roxana Ulman.  Corruption and National Competitiveness in Different Stages of Country Development , 2013 .

[14]  Bruno S. Silvestre,et al.  Challenges for sustainable supply chain management: When stakeholder collaboration becomes conducive to corruption , 2018, Journal of Cleaner Production.

[15]  K. Lopatta,et al.  Corruption, Corporate Social Responsibility and Financial Constraints: International Firm‐Level Evidence , 2017 .

[16]  Rodrigo Lozano,et al.  Towards better embedding sustainability into companies’ systems: an analysis of voluntary corporate initiatives , 2012 .

[17]  C. Sáenz,et al.  The disclosure of anticorruption aspects in companies of the construction sector: Main companies worldwide and in Latin America , 2018, Journal of Cleaner Production.

[18]  Isabel-María García-Sánchez,et al.  The role of the board of directors in the adoption of GRI guidelines for the disclosure of CSR information , 2017 .

[19]  R. Freeman.  Strategic Management: A Stakeholder Approach , 2010 .

[20]  Eve Caroli,et al.  Inequality and Economic Growth: The Perspective of the New Growth Theories , 1999 .

[21]  Gabrio Forti,et al.  Preventing Corporate Corruption. The Anti-Bribery Compliance Model , 2014 .

[22]  David Hay,et al.  The influence of culture and corporate governance on corporate social responsibility disclosure: A cross country analysis , 2018, Journal of Cleaner Production.

[23]  W. Scott.  The Adolescence of Institutional Theory. , 1987 .

[24]  T. Yoshikawa,et al.  Convergence of Corporate Governance: Critical Review and Future Directions , 2009 .

[25]  M. Eisenberg.  The Board of Directors and Internal Control , 1997 .

[26]  H. A. Ondoa.  The determinants of corporate corruption in Cameroon , 2014 .

[27]  Walter Aerts,et al.  Corporate environmental disclosure, financial markets and the media: An international perspective , 2008 .

[28]  D. Cormier,et al.  Corporate governance and information asymmetry between managers and investors , 2010 .

[29]  R. Lenz,et al.  Reflections on the internal auditing profession: what might have gone wrong? , 2012 .

[30]  Gerrit Sarens,et al.  The European literature review on internal auditing , 2006 .

[31]  Klaus Krippendorff,et al.  Content Analysis: An Introduction to Its Methodology , 1980 .

[32]  John Elkington,et al.  Governance for Sustainability , 2006 .

[33]  Tatiana Reyes,et al.  Governance maturity grid: a transition method for integrating sustainability into companies? , 2017 .

[34]  Emmanuel Adegbite.  Good corporate governance in Nigeria: Antecedents, propositions and peculiarities , 2015 .

[35]  I. Filatotchev,et al.  Internal and External Corporate Governance: An Interface between an Organization and its Environment , 2010 .

[36]  Rüdiger Hahn,et al.  Determinants of Sustainability Reporting: A Review of Results, Trends, Theory, and Opportunities in an Expanding Field of Research , 2013 .

[37]  Hasnah Haron,et al.  The relationship between corporate social responsibility disclosure and corporate governance characteristics in Malaysian public listed companies , 2009 .

[38]  J. Lambsdorff.  The Institutional Economics of Corruption and Reform: Theory, Evidence and Policy , 2007 .

[39]  Riccardo Stacchezzini,et al.  Sustainability management and reporting: the role of integrated reporting for communicating corporate sustainability management , 2016 .

[40]  Corina Joseph,et al.  A comparative study of anti-corruption practice disclosure among Malaysian and Indonesian Corporate Social Responsibility (CSR) best practice companies , 2016 .

[41]  D. Cormier,et al.  Does a firm’s exposure to ethical failures matter to financial markets? A governance perspective , 2017 .

[42]  A. Melis,et al.  “Governance and corruption: is history repeating itself?” Fostering a debate and inviting contributions from a multidisciplinary perspective , 2015, Journal of Management & Governance.

[43]  M. C. Jensen,et al.  Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit , 1976 .

[44]  W. Scott,et al.  INSTITUTIONAL THEORY AND INSTITUTIONAL CHANGE: INTRODUCTION TO THE SPECIAL RESEARCH FORUM , 2002 .

[45]  D. Huisingh,et al.  Inter-linking issues and dimensions in sustainability reporting , 2011 .

[46]  L. Preston,et al.  The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications , 1995 .

[47]  R. Melville.  The Contribution Internal Auditors Make to Strategic Management , 2003 .

[48]  Göran Broman,et al.  Analyzing the Concept of Planetary Boundaries from a Strategic Sustainability Perspective: How Does Humanity Avoid Tipping the Planet? , 2013 .

[49]  David Campbell,et al.  A longitudinal and cross-sectional analysis of environmental disclosure in UK companies—a research note , 2004 .

[50]  F. Weyzig.  Political and Economic Arguments for Corporate Social Responsibility: Analysis and a Proposition Regarding the CSR Agenda , 2009 .

[51]  J. Galbreath.  ARE BOARDS ON BOARD? A MODEL OF CORPORATE BOARD INFLUENCE ON SUSTAINABILITY PERFORMANCE , 2012 .

[52]  Gerrit Sarens,et al.  The Relationship Between Internal Audit and Senior Management: A Qualitative Analysis of Expectations and Perceptions , 2006 .

[53]  J. Ribeiro,et al.  Preponderant criteria for the definition of corporate sustainability based on Brazilian sustainable companies , 2019, Journal of Cleaner Production.

[54]  K. Eisenhardt.  Agency Theory: An Assessment and Review , 1989 .

[55]  Philip J. Shrives,et al.  Risk reporting: A study of risk disclosures in the annual reports of UK companies , 2006 .

[56]  Xiaoding Liu.  Corruption Culture and Corporate Misconduct , 2015 .