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The “comply-or-explain” principle in directive 95/2014/EU. A rhetorical analysis of Italian PIEs

Simone Pizzi (Dipartimento di Scienze dell'Economia, Universita del Salento, Lecce, Italy)
Andrea Venturelli (Dipartimento di Scienze dell'Economia, Universita del Salento, Lecce, Italy)
Fabio Caputo (Dipartimento di Scienze dell'Economia, Universita del Salento, Lecce, Italy)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 25 April 2020

Abstract

Purpose

The purpose of this paper is to evaluate the effectiveness of the comply-or-explain principle in the Italian context. In particular, the analysis will evaluate, which factor impact on firms' voluntary adoption of this tool to adequate their non-financial reports to the legal requirements of Directive 95/2014/EU.

Design/methodology/approach

The methodology consists of two different levels of analysis. The first part is statistical descriptive, and it consists of a rhetorical analysis on the justifications provided by the firms about their omissions to comply with Directive 95/2014/EU. The second part is inferential and its aim is to evaluate, which factors impact on comply-or-explains adoption.

Findings

The findings reveal how the comply-or-explain application in Italy has been characterized by several criticisms. The result highlight how the justifications adopted by the firms is influenced by their sector of activity and omission's type. Moreover, the analysis suggests how the sector of activity and the level of adherence to global reporting initiative influenced the average number of omissions.

Research limitations/implications

The limitations of the research are represented by the focuses on a single country and by the short period of analysis. In this sense, future research could be addressed to the analysis of countries different from Italy. Moreover, accounting scholars could provide further contributions to the political debate through the evolution of the “comply-or-explain” principle’s strategies over the years.

Practical implications

The practical implications connected to the present research are twofold. The first one is represented by the possibility for policymakers to increase the degree of attention about the use of comply-or-explain as legitimization's tool. The second one is represented by the possibility for practitioners to identify a new reporting framework.

Social implications

The social implications are represented by the possibility for stakeholders to evaluate the reliability's degree of the disclosure produced by Italian public interest entities after the implementation of Directive 95/2014/EU.

Originality/value

Despite the growing attention paid by academics regard Directive 95/2014/EU, this is the first attempt to analyze the comply-or-explain from a rhetorical perspective.

Keywords

Citation

Pizzi, S., Venturelli, A. and Caputo, F. (2020), "The “comply-or-explain” principle in directive 95/2014/EU. A rhetorical analysis of Italian PIEs", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 1, pp. 30-50. https://doi.org/10.1108/SAMPJ-07-2019-0254

Publisher

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Emerald Publishing Limited

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