Keywords

1 Introduction

The globalization of markets and information has prompted the search for convergence between corporate governance systems, with particular regard to listed companies. In fact, the growing integration of financial markets seems to be a key factor of convergence of corporate governance systems.

In the last quarter century, the convergence has been promoted by regulatory and self-regulatory actions, centred on the sharing of best practices of corporate governance in international value. A host of regulation, standards, recommendations, programmes, and much more has emerged: from OECD Principles of Corporate Governance to the UN Guidance on Good Practices in Corporate Governance Disclosure. These initiatives are undoubtedly necessary and useful, but they seem to promote the so-called de jure convergence rather than the so-called de facto convergence (Khanna et al. 2006).

One of the most striking differences between corporate governance systems is about the firms’ ownership and control across countries (OECD 1999). According to the degree of ownership and control, corporate governance systems can be distinguished in outsider systems (characterized by wide dispersed ownership) and insider systems (characterized by concentrated ownership).

Furthermore, governance practices vary not only across countries, but also across firms and their spirit of governance. Governance strongly oriented to economic responsibility towards shareholders tends to emphasize the differences existing in the firms’ ownership and control. Specifically, in the presence of dispersed ownership, the orientation towards economic performance with a focus on the short term tends to prevail, to get positive feedback from the market. By contrast, in the presence of concentrated ownership, governance is often influenced by the majority shareholders, whose lasting involvement in the property tends to be reflected in the objectives of maximizing economic performance over time. As a result, the dominance of the shareholder view and the economic responsibility have often contributed to de facto divergence in corporate governance.

The acceptance of corporate social responsibility (CSR) and sustainability as business drivers have led managers to shift their attention from profit to the triple bottom line (Salvioni 2003; King 2008; McDonnell and King 2013; Salvioni and Astori 2013; Salvioni et al. 2014), which encompasses profit, people and planet. It is an approach based on a broad vision of responsibility, on a modern interpretation of the links between the long-term success of enterprises and equitable balance of interests of all stakeholders. We deduce that this approach helps to reduce effectively the differences between outsider and insider corporate governance systems.

CSR and sustainability require good corporate governance, grounded on stakeholder engagement, fairness, transparency and accountability. All these principles are related with boards more externally focused, and they determine a governance approach directed to the growth of sustainable value over time. This boards’ focus has increasingly shifted to excellence every corporate governance systems worldwide.

The main finding of this chapter is that sustainability and the broader concept of social responsibility imply a change in spirit of governance, which promotes the de facto convergence between the different corporate governance systems existing all over the word. This spirit is inextricably linked to the culture and performance of an organization, and it implies a stronger focus on the principles and values that dominate internal and external relations, the innovation of the internal processes of behavioural orientation and the enhancement of transparency requirements and multidimensionality of responsibilities, objectives and results.

In form or de jure corporate governance convergence relates to the increasing of similarity in terms of legal frameworks and institutions, and it emphasizes the role of compliance. In function or de facto corporate governance convergence suggests that different countries may have different rules and institutions but the corporate boards may still be able to perform the same function, with attention to the same key performance indicators, such as ensuring fair disclosure or accountability.

In the light of the above, the chapter aims to make some considerations when the adoption of CSR (and connected disclosure) as element characterizing corporate culture represents a factor of in function convergence between insider and outsider systems. The treatment is structured as follows.

The second section briefly depicts the traditional divergences between insider and outsider systems, with particular reference to the characteristics of the stock markets and the composition of the corporate ownership. Furthermore, it underlines the possible passing of these divergences by means of the diffusion of sustainability and the broader concept of social responsibility, where good corporate governance is focused on achieving sustainable value. In particular, the modern interpretation of the links between the long-term enterprise’s success and the equitable balance of all stakeholders’ interests could lead to the overcoming of certain differences in key performance indicators that traditionally characterize the insider and the outsider systems of corporate governance.

The third and fourth sections underline how social responsibility, on the one hand, increases the interest of shareholders and other stakeholders to create sustainable value, on the other, it supports the convergence of cognitive expectations on a broad concept of economic and socio-environmental performances. The stakeholder engagement necessitates achieving better corporate transparency and accountability so it is useful to change the reporting system according to the logic designed to satisfy evaluation and knowledge expectation of the stakeholders across the triple bottom line. Social responsibility, promoting increasing convergence behaviour between insider and outsider systems dictated by orientation towards sustainable value creation, finds a significant success element in the adoption of common reporting documents.

The fifth section analyses the operational factor of convergence between insider and outsider systems promoted by sustainable corporations. Although a substantial convergence in the values declared by sustainable companies and the numerous proposal attempts regards global disclosure models, not always the disclosure declarations and behaviours coincide.

The sixth section makes same final considerations about the modification of corporate policies by sustainable companies, independently by the financial markets’ characteristics and companies’ ownership. This situation weakens the divergence between insider and outsider systems.

2 Corporate Governance and Capital Markets

Globally recognized systems of corporate governance are based on the relationship between ownership and governance bodies (administration/management and control). In this respect, different systems consider the following:

  • the relationships between corporate boards, aimed at distinguishing monistic systems from dualistic ones;

  • the delegation in nomination processes characterizing corporate governance systems, aimed at distinguishing horizontal dualistic models (in which both the management board and the supervisory board are appointed by the general shareholders meeting) from vertical ones (in which the general shareholder meeting, sometimes in conjunction with employees, appoints the supervisory board, who subsequently appoints the management board) (G20/OECD 2015).

When considering listed companies in different countries, financial market features and the level of concentration of ownership become important. In this respect, they distinguish outsider systems from insider systems (Salvioni 2008).

Outsider systems, typical of Anglo-Saxon countries, are characterized by the dominance of large listed companies with very fragmented and diffused ownership (public companies) and by the separation between ownership and management. In the presence of truthful, fair and transparent communications, the efficient functioning of capital markets determines the consent/control of administrative activity. The approval/disapproval of the work of the governance bodies is therefore reflected in the following: a change in share values, resulting from the dynamics of demand and supply of shares owned; the turnover at corporate governance mandate level and the mandate of shareholders.

The dominant model in outsider systems is the monistic one, with governing bodies with a typically short mandate (annual) and characterized by a high level of independence. In such situation, the market has the direct control over corporate governance, according to information received on the company’s behaviour and current/future results. Reporting takes on an important role, and it highlights the role of external controls directed at the certification of information.

Outsider systems require well-developed stock markets, and they have high potential to attract resources, with the possibility of shift in investment from one share to another, depending on the information available on corporate governance and the related performance (Fama 1980; OECD 1996; Shleifer and Vishny 1997). Generally, in such contexts, the institutional investors act as market facilitators (OECD 1997, 1999).

On the other hand, insider systems are typical of countries generally characterized by less developed financial markets. They have a concentrated and frequently stable ownership, with the majority shareholders involved in the management and able to influence corporate governance. In such contexts, there are monistic and dualistic systems, although the lack of ability to control the market highlights the importance of the adoption of systems that provide a specific supervisory board of corporate governance (dualistic systems) (OECD 1999; Salvioni 2008).

In insider systems (notably Continental Europe and Japan), the mandate of corporate governance is generally multiyear (Salvioni 2008; Yermack 2010). There is a high level of participation in management by majority shareholders, with a reduced incidence of independent members in the administrative body and a limited turnover at a corporate governance mandate level. In these situations, the competitive approach to the stock market is essentially defined by the desire to maintain a high value of stock and, not infrequently, it can be affected by shareholder resolutions intended to authorize the purchase of their own shares.

The presence of one or more controlling shareholders and the possible existence of shareholder agreements tend to affect governance in insider systems, and reporting is often constrained by rules and recommendations aimed at protecting the proper functioning of markets.

Beyond the different characteristics of the stock markets and the corporate shareholding structure, shareholders have always had a significant role in the attribution of the mandate of corporate governance. In fact, the general shareholders meeting is often the only responsible for appointing the members of governance board, and even with worker participation (as in Austria, Denmark, Germany, Luxembourg and Sweden, where employees of companies of a certain size have the right to elect some members of the supervisory body), it generally tends to intervene significantly in the conferment of the mandate of governance. This has contributed to the affirmation of the shareholder view, which has long dominated the orientation of corporate governance, emphasizing economic performance and financial reports.

In the past, the choices of corporate governance have therefore favoured profit maximization (Berle and Means 1932; Friedman 1962, 1970; Jensen and Meckling 1976), with a clear focus on obtaining the consent of shareholders. Such behaviour was particularly evident in outsider systems, but it dominated the majority of companies in industrialized countries. In fact, for listed companies, a governance approach oriented to shareholders implied important differences about management activities in outsider and insider systems. This situation was connected to the diverse degree of separation between ownership and management and to the consequent implications in terms of market and control value.

In the outsider systems, the high dispersion of share capital tied the corporate success with the maximization of the short-term profit. The aim was to guarantee positive judgments by the market with regard to the actions of managers characterized by a high level of independence. In this context, shareholders appreciated the governance effectiveness referring to their expectations of short-term remuneration and their approval conditioned the board members’ appointment and the shares’ market value.

Vice versa, in insider systems the high capital’s concentration and the frequent engagement in management by majority shareholders, who was often executives, caused governance activity oriented to the maximization of the value creation over time. In fact, the majority shareholders’ behaviour deeply influenced corporate governance, because their lasting participation in ownership determined the preponderance of goals oriented to the maximization of economic performance in the long-term (OECD 1999; Salvioni and Gennari 2014).

The latest arise of new concepts referring to sustainability, social responsibility and stakeholder relation management (Steurer et al. 2005) is inducing a new approach about the role of companies in society, with clear consequences in terms of performance and reporting.

Corporate sustainability does not mean that the creation of value and the adequate shareholders’ remuneration are less important; vice versa, the interdependence among stakeholder relation management, economic and socio-environmental responsibility, results (economic and not economic ones) and capability to obtain consents and resources is opportunely emphasized.

A governance approach directed to the enhancement of value creation for shareholders over time, by means of opportunities’ exploitation and economic, social and environmental risk management, is gaining ground (Esty and Winston 2008; Brochet et al. 2012; Salvioni and Astori 2013). A sustainable company is clearly aware of its own responsibilities towards different stakeholders, and it adopts governance methods and tools with the aim to improve its economic, social and ecological performances. This is an approach based on a wide concept of responsibility and on a modern interpretation of the link between the long-lasting company’s success and fair settlement of all stakeholders’ interests (Salvioni 2003; Salvioni and Bosetti 2006).

In global markets, the need of corporate governance improvement is spreading, according to these objectives:

  • to favour the convergence in governance systems for dealing with the fall of time and space barriers in the information and capital circulation;

  • to appreciate the links among economic, competitive and socio-environmental management variables;

  • to develop strategies and accountability tools with the aim to favour stakeholder engagement and to improve the transparency about global performances.

These are phenomena strictly connected, implying a greater attention towards principles and values that lead internal and external relations and innovation in processes for a systematic, coordinated, effective and efficient sustainable development.

In this sense, many international recommendations and numerous national regulating actions proliferate, promoting a growing attention for the quality of governance and reporting.

In particular, the statement and diffusion of responsible governance principles favour a global convergence in the governance tendencies towards value creation and growth in the long term. This condition removes a substantial divergence factor between insider and outsider corporate governance systems, and it represents a prerequisite for a better capitals circulation and for the crossing of speculative investment logics that are often characterized by a high shareholders’ turnover.

In this regard, see the text of letter sent in March 2014 by Larry Fink, BlackRock’s Chairman and CEO, to Chairman or CEO clients. He writes: «To meet our clients’ needs, we believe the companies we invest in should similarly be focused on achieving sustainable returns over the longer term. Good corporate governance is critical to that goal. That is why, two years ago, I wrote to the CEOs of the companies in which BlackRock held significant investments on behalf of our clients urging them to engage with us on issues of corporate governance. While important work remains to be done, good progress has been made on company-shareholder engagement. I write today re-iterating our call for engagement with a particular focus on companies’ strategies to drive longer term growth». This assertion is confirmed in the Annual Letter to BlackRock’s Shareholders of 16/04/2015: «This annual report highlights how the platform we’ve created over time translates into long-term value for clients and shareholders even in the face of global market upheaval. But it also gives us a chance to look towards the future. BlackRock has stayed ahead of the competition over time by thinking long term: building the technology, talent and investment solutions that our clients and shareholders can build on, and that will pay dividends for decades, not just quarters».

The debate on sustainability and social responsibility is connected to new accountability needs. Changes in the governance orientation imply changes in the internal and external communication, promoting contents and circulation choices better complying with the stakeholders’ cognitive and evaluating expectations. This situation induced a gradual change in reporting, also with the aim to develop transparent models with international value (Salvioni and Bosetti 2014).

The timely and accurate mandatory or voluntary disclosure on financial and non-financial information about all important matters regarding companies should contribute to the convergence of interests between shareholders and other stakeholders, emphasizing their important role in contributing the long-term success and performance of the company.

3 The Link Between Stakeholder Relation Management and Shareholder Satisfaction

The CSR requires the involvement and the appreciation of stakeholders’ expectations, the transfer of top management orientations into behaviours, the verification of the consistency among aims, management objectives and actual results, in order to optimize performances and intercompanies relations.

The transition from a situation of overriding attention to shareholders and related economic responsibility to a clear appreciation of all stakeholders and the set of company’s responsibilities (economic, social and environmental ones) are associated with the following:

  • the expansion of relevant external stakeholders (Marlin and Marlin 2003), which is correlated to increased attention to fairness in the conduct of governance;

  • the refinement of the forms of internal control systems designed to make effective the relationship between the corporate governance bodies and the organization;

  • the change of reporting system, according to the logic designed to satisfy evaluation and knowledge of stakeholders’ expectations across the triple bottom line.

The triple bottom-line logic broadens the traditional reference framework for the effectiveness of governance. Company success is no longer based only on criteria of economic performance, but it is linked to the optimization of environmental and social performance. Thus, sustainable enterprises determine their strategy considering the three aforementioned dimensions of performance, according to the logic of global responsibility, and consequently, they draw up long-, medium- and short-term objectives and processes aimed at ensuring their effective and efficient implementation.

Economic performance, on the other hand, is strongly influenced by the ability to maintain positive relationships with all relevant stakeholders (shareholders, employees, customers, suppliers, etc.), so that the shareholders’ expectations have more potential of satisfaction compared to CSR-oriented managerial approaches (Carroll and Buchholtz 2006; Friedman and Miles 2006; Carroll 1979, 1999).

Therefore, the assumption of the stakeholder view (Freeman 1984; Jacoby 1973; Longstreth and Kesenblum 1973; Donaldsond and Preston 1995) leads to a profound change in the valuation of company’s performance in relation to the enhancement of the reconciliation factors of competitive, economic and socio-environmental variables.

The ability to give effective answers to ownership’s expectations is still a significant dimension, the achievement of which is durable but facilitated by meeting the expectations of other stakeholders and by respect for the environment (Salvioni 2003). The effectiveness of stakeholder relations is primarily correlated to the affirmation of a good governance approach, based on the respect of equity, fairness and transparency and on the activation of stakeholder engagement processes.

Therefore, the assertion of social responsibility increases shareholders’ and other stakeholders’ interests in the creation of sustainable value, widening their potential involvement in sustainable management. At the same time, it supports the convergence of cognitive expectations on a broad concept of performance, geared to enhancing the relationship between economic and socio-environmental variables (Gray et al. 1996; Guthrie and Parker 1990).

Increased exposure to and permeability of information by the various parties highlight the need to rationalize communications guaranteeing effectiveness, transparency and convergence compared with expectations. Likewise, the interdependence of economic, social and environmental responsibility (Deegan and Rankin 1997; Daub 2007) underlines the usefulness of final summary and programmatic documents aimed at supporting the employment of policies and emphasizing the principles of global responsibility, monitoring their implementation.

In particular, socially responsible companies are induced to change their reporting systems, enhancing the function of consensus management and behavioural orientation, both internally and externally. This change concerns internal reports, which are significant base for responsible decision-making and tools to orientate leaders’ and organization’s behaviours, and external reports, aimed at supporting effective interaction with shareholders and all other stakeholders.

The transformation of sustainability objectives into actual results gives specific importance to the internal communication system, aimed at spreading the culture of sustainability, to getting used to the assumption of socially responsible behaviour at all levels of the organization, to connect the behavioural effectiveness and the assessment to the multidimensionality of performances.

The actual ability to create sustainable value comes from the ability to orientate all management behaviours to optimize overall performances, necessarily based on the integration of performance across the triple bottom line.

Many information contained in internal reports are also a useful base for communications to external stakeholders as part of the economic synthesis reports (annual report) and/or of the sustainability reports (sustainability reporting, CSR reporting, integrated reporting, etc.). In fact, internal reports intend to improve the sustainability of behaviours assumed by stakeholders (leaders and employees) responsible for exercising corporate responsibility. However, the results of exercising this responsibility offer indications for the assessment of company’s capability to equally satisfy stakeholders’ expectations over time.

4 Stakeholder Relation Management and External Reporting

External social and environmental reporting has been subject of numerous interventions by major international players (as Global Reporting Initiative 2011; International Integrated Reporting Council 2013), as well as of substantial researches (Gray et al. 1987; Guthrie and Parker 1990; Roberts 1991; Kolk 1999; Cormier and Gordon 2001; Cerin 2002; Hibbit 2004; Mathews 1997). In this area, a number of documents that deal with the subject has been analysed, such as the social reporting, the environmental reporting, the social and environmental reporting, the sustainability report, the CSR reporting and the integrated reporting.

Therefore, the gradual affirmation of principles of social responsibility has led to the flanking of numerous financial reports with other reports aimed at showing specific results, often with significant differences in content and significant space–time divergences. In the first step of expansion of companies’ responsibilities, the social and the environmental reporting have been widely used. Subsequently, additional documents have been proposed with functions of spreading integrated information, including sustainability reporting (Roca and Searcy 2012; MacLean and Rebernak 2007) and integrated reporting (Salvioni and Bosetti 2014).

At present, a common approach in terms of naming of reports for accountability does not always seem to exist. For example, the analysis of documents submitted in April 2015 by 20 companies present in the Global 100 index (Table 2.1), for five consecutive years (2010–2015), highlights a very complex situation (Table 2.2). In this respect, Gray (2002) argues that the various designations employed, far from being substantially different, simply represent tags to identify a phenomenon characterized by common specifics.

Table 2.1 The companies analysed: countries, sectors and corporate governance systems
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Table 2.2 Type of social reporting
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The companies taken into consideration belong to both countries characterized by insider corporate governance systems (eleven companies) as well as to outsider systems (nine companies). However, all these companies have a strong focus on sustainable disclosure, as this is the first criterion for selectionFootnote 1 adopted for inclusion in the Global 100 index.Footnote 2

In fact, Corporate Knights Capital highlights: «The first screen eliminates companies that are not keeping pace with the sustainability reporting trends in their specific industry. Companies that fail to disclose at least 75% of the “priority indicators” for their respective “Global Industry Classification Standards (GICS) Industry Group are eliminated at this point in the project. Companies classified in Industry Groups where all 12 KPIs are priority indicators will need to disclose at least 9 (12 × 75% = 9) KPIs in order to pass this screen. The list of priority indicators may change in the future as disclosure practices evolves».

In addition, companies that pass this first selection criterion undergo further stages of selection: the financial dimension of the company (analysis of indicators such as net profit, operating cash flow, gross margin, etc.); the type of production (e.g. companies with a GICS Sub-Industry classification equal to Tobacco are eliminated); the amount in dollars paid by the company for penalties resulting from fines or penalties for environmental and social damage. The companies that have passed the mentioned above four selection criteria are further assessed, in order to identify the 100 companies who can belong to the Global Index. The ranking is defined by weighing and assigning scores based on the following 12 KPIs: energy productivity; carbon productivity; water productivity; waste productivity; innovation capacity; percentage tax paid; CEO to average worker pay; pension fund status; safety performance and number of lost time incidents; employee turnover; leadership diversity; clean capitalism pay link.

In order to verify the correlation between responsibility, stakeholder relationships and accountability, the reports indicated in Table 2.3 were analysed for investigating the real motivations that led to companies preparing such reports. The analysis of the sustainable report shows that a responsible company oriented towards sustainable development, regardless of operating in insider or outsider system, considers reporting economic and socio-environmental responsibility fundamental pursued through the transparent communication of performance reached, to meet the cognitive and evaluative expectations of shareholders and other stakeholders. In addition, the companies surveyed sustain the importance of participation, through consultation mechanisms, to achieve constructive and functional feedback for the construction of reports, as well as the continual improvement of corporate accountability.

Table 2.3 The motivation for adopting sustainability reporting
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Social responsibility, promoting increasing convergence behaviours between insider and outsider systems dictated by orientation towards sustainable value creation, finds a significant success factor in the adoption of common reporting documents. This is thanks to the efforts in this direction made by GRI, IIRC and many other transnational institutions.

5 Sustainability and Social Responsibility as Operational Factor of Convergence

The integration of markets caused by globalization started a gradual convergence process involving different corporate governance systems. (Carati and Tourani 2000; Mallin 2001; Aguilera and Jackson 2003). This situation interests both financial and products’ markets and has significant effect on corporate governance. In financial markets, the phenomenon of international diversification by investors is increasingly spreading because of the proposition that holding an international portfolio leads to higher return and minimizes risks. Companies too attempt to obtain more resources at lower costs trying to attract investors and shareholders on international capital markets. This situation implies the acceptance by companies of international corporate governance standards (e.g. about the composition of corporate governance bodies and reporting) that favour the adoption of common behaviours. Also, the globalization of products’ markets impacts on corporate governance: when competition intensifies worldwide, the capability to design effective strategies by governance bodies represents a critical factor of company’s success and tends to be a best practice for other companies.

The events of convergence between outsider and insider systems can be observed according to the following dimensions (La Porta et al. 2000; Gilson 2004; Khanna et al. 2006; Yoshikawa and Rasheed 2009; Lazarides and Drimpetas 2010). The convergence appearing among national systems, encouraged by the production of rules about high-quality corporate governance standards, is the so-called de jure or formal convergence. The convergence characterizing corporate behaviours, motivated by the search of competitive advantages through the adoption of missions and targets critical for the performance optimization in global markets, is the so-called substantial or de facto convergence.

The formal convergence is about the systems and the corporate governance rules characterizing different countries. Many studies confirmed the diffusion of mandatory and voluntary rules at international level with the aim to favour the integration of financial markets and the effective finding of resources (Stiles and Taylor 1993; Coffee 1999; Aguilera and Cuervo-Cazurra 2004; Collier and Zaman 2005; Markarian et al. 2007).

An intense debate about the strengths and weaknesses of different corporate governance systems has characterized the last decades. The corporate governance systems are the results of cumulative processes, which create regulatory and cultural substratum, influencing contingent attempts of adaptation to different models (path dependence) (North 1990, 2005; Bebchuk and Roe 1999). Hence, it is not possible that the better rules of corporate governance can be implemented in each environment with the predicted results (Puchniak 2007). Indeed, countries seem to be characterized by situation of multiple optima in which the corporate governance best practices are accepted and executed respecting the existing bounds (Khanna et al. 2006).

The existence of mandatory (e.g. international financial reporting standards) or voluntary (e.g. recommendations by European Parliament and Council) international norms can represent a stimulus for formal compliance without qualifying, however, a guarantee of substantial convergence in the long term, this last based on a real culture of compliance existing in the company. In fact, the value of compliance should be embedded in the corporate culture, as a shared principle that guides the behaviour of the entire organization and constitutes the basis for managing any type of risks connected to global corporate responsibility in the long run.Footnote 3

Vice versa, the adoption of a corporate philosophy inspired by sustainability—that is to say characterized by the emphasis on global responsibility and by the will to equally satisfy stakeholders’ expectations—seems to be a significant factor of substantial convergence towards the reduction of the gap between insider and outsider systems (Salvioni and Gennari 2016; Salvioni et al. 2016a, b, c).

The inclusion of CSR in the corporate culture identifies the sustainable companies. In spite of different ways to realize corporate strategies, according to regulatory and organizational ties, this view leads to the definition of targets oriented to the minimization of economic, social, and environmental risks and to the maximization of corporate global value in the medium to long term for the benefit of wide stakeholders’ groups.

In fact, the tendency of governance towards sustainability principles represents a critical factor for company’s success not only in insider systems, traditionally characterized by objects of performance maximization in the long term, but also in outsider systems (Eccles et al. 2011) historically oriented to the satisfaction of diffused ownership (Sect. (3.2).

So, considerations about CSR disclosure are strictly related to the convergence of corporate governance behaviours because of the association between these two complimentary mechanisms used by companies to enhance relations with stakeholders (Eng and Mak 2003; Van der Laan Smith et al. 2005; Haniffa and Cooke 2005; Chan et al. 2014). The sustainability reports, presenting the organization’s value and governance model, should express the link between the company’s strategies and commitment towards a sustainable corporate performance and sustainable global economy.

The analysis of the selected 20 companies (Sect. (3.4) confirms the emphasis on the link between sustainability and stakeholders’ satisfaction by means of value creation in the long run independently from the company’s activity in insider or outsider systems (Table 2.4).

Table 2.4 Declared values (mission/vision/strategy overview)
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The creation of privileged relationships with wide stakeholders’ group expresses the crossing of the logic of the short-term value creation for the exclusive interest of shareholders. The latter are intended to belong to a greater category of company’s public, and they deduce large benefits too by the exploitation of value creation opportunities and by the effective economic, social and environmental risk management.

Successful companies put effort into the adoption and strengthening of governance processes that are coherent with the international best practices standards. With this way, they can manage the business complexity and the relevant conditions for a sustainable development in the long term.

The effectiveness of responsible governance is related to strategies that emphasize the integration among economic, social and environmental performances and to the coherent definition of structures and processes (e.g. CSR committee and internal reports) that guarantee the realization of the strategies themselves. The external reports are the tools the companies use to inform their stakeholders about the corporate structure, the mission, the strategies, the results obtained according to a global corporate responsibility approach.

Although a substantial convergence in the values declared by sustainable companies selected in our study and the numerous proposal attempts regards global disclosure models (UN Global Compact Principles, OECD Guidelines, Integrated Reporting, GRI, etc.), not always the disclosure behaviours coincide. The enlargement of stakeholders’ categories determines, even now, the production of different number of information in sustainable and annual reports, probably according with the belief that the amount of CSR disclosure provided by a company signifies the importance the company attaches to such matters (Gray et al. 1995; Deegan and Ranking 1996; Neu et al. 1998). For example, the 20 companies analysed privilege GRI guidelines because of their quantitative value and objectivity (Tschopp and Nastanski 2014), but they sometime simultaneously refer to other standards and their sustainability reports do not present uniform subjects’ index (Table 2.5).

Table 2.5 CSR disclosure standards
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This situation cannot favour the immediate comparison about companies’ sustainability performances by a non-expert stakeholder, who has to look for desired information in hundreds of pages. Moreover, industry guidelines and national rules about CSR disclosure can increase the data communicated in reports.

A way to simplify the comparison among companies belonging to different countries and businesses could be the compulsory inclusion of limited, but significant, CSR data in the mandatory financial reports, delegating the in-depth disclosure of different CSR aspects and performances to voluntary CSR reports.

The Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups seems to move in this direction, with the aim to provide investors and other stakeholders with mandatory and more comprehensive picture of a company’s financial, social and environmental performances. This directive imposes on some large companies to disclose their management report, information on policies, risks and outcomes (as regards environmental matters, social and employee aspects, respect for human rights, anticorruption and bribery issues, and diversity in their board of directors). Now, the EU does not impose disclosure standards, referring to the voluntary existing ones, but the Commission is to develop non-binding performance guidelines to facilitate the disclosure (the consultation with stakeholders is underway until the end of 2016). These guidelines could constitute best practices standards, first for European corporations and for those belonging to the supply and subcontracting chains, with a large impact at global level.

Hence, the convergence between insider and outsider systems is evolving. The formal and substantial convergence phenomena mutually influence each other, outlining a continuous path towards global governance best practices and disclosure, with the main aim to create long-term value, thanks to the relations between companies and their stakeholders.

6 Emerging Issues

Over the last few years, the issues of sustainable development and global corporate responsibility have emerged as relevant factors for the effectiveness of corporate governance. In this regard, numerous international institutions have intervened and companies, at least officially, have increased their focus on the interdependence between stakeholder relationship management and economic, social and environmental responsibility.

The increasing emphasis on sustainability in the governance leads to a greater focus on the dominant principles and values in internal and external relations, the innovation of internal processes of behavioural orientation and external communication.

The diffusion of the principles of sustainability and a broader concept of responsibility have, undoubtedly, promoted a review of the relevant performances of companies, creating significant preconditions of operational convergence between insider and outsider corporate governance systems.

In fact, in successful companies, the corporate governance is characterized by a widening scope of the goals, having to take an interest in the entire network of internal and external relations, according to an approach based on the exchange of information and the optimization of behaviour in relation to the stakeholders’ expectations.

Regardless of the nature of stock markets and the concentration of ownership, socially responsible companies have therefore amended their corporate policy, giving importance to the creation of sustainable value as a condition for growth and development in the medium to long term. Hence, a major factor of divergence between insider and outsider corporate governance systems attenuates, because of the different time orientation in the results statement. However, we should consider that globalization—together with the gradual reduction of differences between spatial differences, cultures, information systems, traditions and institutions—tends to require greater uniformity in the corporate governance approaches worldwide. In addition, the lowering of barriers among markets and the capitals flow have increased the alternatives for investors and the belief that the orientation to value creation in the long run may be a significant factor in reducing investment risk.

The change in the governance approach has also stressed the importance of corporate communication, promoting the spread of information content and diffusion choices that are increasingly responsive to the expectations and knowledge evaluation of stakeholders. In this regard, academics and practitioners have taken an interest in the contents, updating and dissemination of corporate communication since the last decade of the twentieth century, in order to overcome the partiality of information that was typical of documents focalised on specific aspects of responsibility. In this regard, some reports promoting a continuous and effective analysis of corporate structures, processes and results have become more and more important. The large number of proposed models highlights however difficult convergence towards a single model designed to allow all concerned to ascertain who managed the responsibility, how it was handled and what the achievements and future expected results are in terms of contribution to sustainability.