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This paper aims to examine the European Union (EU) 95/2014 Directive’s impact on large public companies. It chose Italy as a pivotal country that made non-financial information assurance mandatory, going beyond the EU Directive’s original requirements. Specifically, it investigates how the UE Directive fosters institutionalisation of the non-financial reporting (NFR) process in organisations.

Two large public companies in Italy are used as case studies. Data are gathered from annual and integrated reports, institutional websites and semi-structured interviews with the managers and employees involved in different organisational positions. The authors adopted the neo-institutional theory as a theoretical lens to identify the organisations’ response to the (external) institutional pressures influencing corporate reporting practices.

The findings demonstrate how the EU Directive fostered changes to large public companies’ reporting practices and external pressures contributed to influencing changes to internal organisational practices in terms of new internal processes, procedures and structures. These changes are motivated by the companies’ need to guarantee reliable information to be produced in their non-financial reports.

This paper helps academics and policymakers to advance NFR practices by understanding regulatory factors that can foster changes in the internal reporting process and responsibility within organisations.

The findings provide some empirical insights to foster reflections on the EU Directive’s effectiveness in changing reporting practices. This paper contributes to enriching the literature on institutional theory in shaping mandatory non-financial disclosure by identifying the institutional pressures influencing the effectiveness of regulations to change NFR practices.

In this chapter, the authors weave together a set of ideas that lead us closer to a more general institutional theory – one that embraces multiple levels of analysis, including the micro-level. The authors build on the roots of micro-institutional thought – including phenomenological and ethnomethodological underpinnings – as well as very active, social-psychological research areas that address key mechanisms in institutionalization. Among these, the authors discuss the important roles of legitimacy, trust, social influence, and routines. There is great promise for micro-institutional inquiry to make an integral contribution to institutional theory by bringing processes and people back in.