Investigation of risk management and risk disclosure practices of Italian listed local utilities

Titolo Rivista FINANCIAL REPORTING
Autori/Curatori Selena Aureli, Federica Salvatori
Anno di pubblicazione 2013 Fascicolo 2013/1
Lingua Inglese Numero pagine 47 P. 121-167 Dimensione file 822 KB
DOI 10.3280/FR2013-001006
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più clicca qui

Qui sotto puoi vedere in anteprima la prima pagina di questo articolo.

Se questo articolo ti interessa, lo puoi acquistare (e scaricare in formato pdf) seguendo le facili indicazioni per acquistare il download credit. Acquista Download Credits per scaricare questo Articolo in formato PDF

Anteprima articolo

FrancoAngeli è membro della Publishers International Linking Association, Inc (PILA)associazione indipendente e non profit per facilitare (attraverso i servizi tecnologici implementati da CrossRef.org) l’accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche

Local utility services deeply affect the overall quality of life of a country’s population. For this reason service providers should pay strong attention to risk management practices, but also to the external communication of both the risk exposure and the risk responses. Following a qualitative methodology, this paper aims at exploring the risk management and risk disclosure practices of five Italian listed local utility companies combining two research methods: questionnaire and document analysis. Results show that these Italian listed local utilities are characterized by different maturity levels of risk management practices, which are not extensively disclosed in public reports and documents. Interestingly, the link between the level of disclosure and maturity of risk management practices is confirmed just for those companies that seem to be the most mature in terms of risk management.

Keywords:Risk disclosure; public utilities; risk management

  1. Abatecole G. and Poggesi S. (2007), Governance e performance delle imprese italiane di servizi pubblici locali quotate: un’analisi empirica. Economia Pubblica, 37(3/4), pp. 99-118, DOI: 10.1002/sej.6
  2. Alvarez S.A. and Barney J.B. (2008), Opportunities, organizations, and entrepreneurship. Strategic Entrepreneurship Journal, 2(4), pp. 265-267.
  3. Apgar D. (2006). Risk Intelligence. Learning to manage what we don’t know. (Boston, MA: Harvard Business School Press).
  4. Aureli S. and Salvatori F. (2012a), Are performance-dependent rewards a viable tool to assure managers’ commitment toward firm’s goals about risk management?, in Epstein M.J. and Manzoni J. (eds.), Performance Measurement and Management
  5. Control: Global Issues. (Bingley: Emerald Group), DOI: 10.1108/S1479-3512(2012)0000025013
  6. Aureli S. and Salvatori F. (2012b), Perceptions of Risk Management Practices through the reading of public corporate financial documents. Paper presented at 3rd Financial Reporting Workshop, Naples, (Italy), June 14-15, 2012.
  7. Baird I.S. and Thomas H. (1985), Toward a contingency model of strategic risk taking. Academy of Management Review, 10, pp. 230-243, DOI: 10.5465/AMR.1985.4278108
  8. Beasley M.S. and Frigo M. (2007), Strategic Risk Management: creating and protecting value. Strategic Finance, May, pp. 25-53.
  9. Beasley M.S., Cune R. and Hermanson D.R. (2005), Enterprise risk management: An empirical analysis of factors associated with the extent of implementation. Journal of Accounting and Public Policy, 24(6), pp. 521-531, DOI: 10.1016/j.jaccpubpol.2005.10.001
  10. Beretta S. and Bozzolan S. (2004), A framework for the analysis of firm risk communication. The International Journal of Accounting, 39(3), pp. 265-288, DOI: 10.1016/j.intacc.2004.06.006
  11. Boesso G. and Kumar K. (2007), Drivers of corporate voluntary disclosure: a framework and empirical evidence from Italy and the United States. Accounting, Auditing & Accountability Journal, 20(2), pp. 269-296, DOI: 10.1108/09513570710741028
  12. Borgonovi E. (1998), Le nuove frontiere dei servizi pubblici tra soddisfazione dell’utente e tutela dell’interesse pubblico, Sinergie, 41, pp. 3-13.
  13. Branson B.C. (2010), The role of the Board of Directors and Senior Management in Enterprise Risk Management, in Fraser J. and Simkins B.J. (Eds), Enterprise Risk Management. Today’s leading research and best practices for tomorrow’s executives. Kolb Series in Finance. (Chichester: Wiley).
  14. Broadbent J. and Guthrie J. (2008), Public Sector to Public Services: 20 years of ‘Contextual’ Accounting Research, Accounting, Auditing & Accountability Journal, 21(2), pp. 129-169, DOI: 10.1108/09513570810854383
  15. Brooks D.W. (2010), Creating a Risk-Aware Culture, in Fraser J. and Simkins B.J. (Eds), Enterprise Risk Management. Today’s leading research and best practices for tomorrow’s executives. Kolb Series in Finance. (Chichester, Wiley).
  16. Cassell C. and Symon G. (1994), Qualitative research in work contexts, in Cassell C. and Symon G. (Eds), Qualitative methods in organizational research, a practical guide. (London: Sage).
  17. CNDCEC (2009, 14 January), La relazione sulla gestione art. 2428 codice civile. La relazione sulla gestione dei bilanci d’esercizio alla luce delle novità introdotte dal D.Lgs. 32/2007. Rome.
  18. Collier P.M. (2009), Fundamentals of risk management for accountants and managers. (Oxford: Elsevier).
  19. Confservizi (2009), L’evoluzione economica delle imprese di servizio pubblico locale.
  20. Corbetta P. (2003), La ricerca sociale: metodologia e tecniche. Vol. I – I paradigmi di riferimento. (Bologna: il Mulino).
  21. COSO (2004), Enterprise Risk Management-Integrated Framework. (New York: COSO).
  23. COSO (2009), Effective Entrerprise Risk Oversight. The role of the Board. Of Directors. Retrieved from http://www.coso.org/documents/COSOBoardsERM4pager-FINALRELEASEVERSION 82409_001.pdf.
  24. COSO (2010), Developing Key Risk Indicators to strengthen Enterprise Risk Management. Retrieved from http://www.coso.org/documents/COSOKRIPaperFull-FINALforWebPostingDec110_000.pdf.
  25. Craven B., Marston C. (1999), Financial reporting on the internet by leading UK companies, The European Accounting Review, 8(2), pp. 321-333, DOI: 10.1080/096381899336069
  26. Cristofoli D., Vallotti G. (2007), Proprietà e corporate governance delle public utilities. Economia & Management, 2, pp. 75-92.
  27. Crouhy M., Galai D. and Mark R. (2006), The essentials of risk management. (New York: McGraw-Hill).
  28. Dalgleish F. and Cooper B.J. (2005), Risk management: developing a framework for a water authority, Management of Environmental Quality, 16(3), pp. 235-249, DOI: 10.1108/14777830510591660
  29. Dobler M. (2005), How Informative Is Risk Reporting? A Review of Disclosure Models, Munich Business Research Working Paper No. 2005-01, Munich School of Management, DOI: 10.1016/j.intacc.2008.04.005
  30. Dobler M. (2008), Incentives for risk reporting – a discretionary disclosure approach and cheap talk approach, The International Journal of Accounting, 43, pp. 184-206.
  31. English M.R. (2000), Who are the stakeholders in environmental risk decisions? How should they be involved?, Risk: Health, Safety & Environment, 11, pp. 249-250.
  32. Frigo M. and Anderson R.J. (2009), Strategic risk assessment, Strategic Finance, December, pp. 25-33.
  33. Frigo M.L. (2008), Strategy and ERM meet, Strategic Finance, pp. 45-49. Frigo M.L. (2009), Strategic Risk Management: the new core competency. Management Synergies, January-February, pp. 7-10.
  34. Gough J.D. (1997), Environmental Decision Making and risk management for groundwater systems, Risk: Health, Safety & Environment, 8, pp. 155-172.
  35. GovernanceMetrics International (2009, June 29), GMI Looks at corporate boards and risk oversight. Retrieved from http://www.gmiratings.com/ Release_GMI_Boards _Risk_Oversight_6_29_09.pdf. Accessed on 21 April 2012.
  36. Grant R.M. and Visconti M. (2006), The strategic background of corporate accounting scandals, Long Range Planning, 39, pp. 361-383, DOI: 10.1016/j.lrp.2006.09.003
  37. Grigg N.S. (2006), Ready or not? Disaster preparedness and emergency response in the water industry, American Water Works Association Journal, 98(3), pp. 242-255.
  38. Grossi G. (2007), Governance of public-private corporations in the provision of local utilities in the Italian case, International Public Management Review, 8(1), pp. 130-151.
  39. Guthrie J. and Abeysekera I. (2006), Content analysis of social, environmental reporting: what is new?, Journal of Human Resource Costing & Accounting, 10(2), 2006, pp. 114-126.
  40. Hagigi M. and Sivakumar K. (2009), Managing diverse risks: An integrative framework, Journal of International Management, 15, pp. 286-295, DOI: 10.1016/j.intman.2009.01.001
  41. IACCM (2003), Organisational maturity in business risk management. Retrieved from http://www.risk-doctor.com/pdf-files/brm1202.pdf.
  42. ICAEW (2011), Reporting business risks: meeting expectations. Retrieved from http://www.icaew.com/~/media/Files/Technical/Financial-reporting/Information %20for%20better%20markets/IFBM/rbr-final.ashx. Accessed on April 20th.
  43. IMA (2007), Enterprise risk management: tools and techniques for effective implementation.
  44. Statements on Management Accounting published by the Institute of Management Accountants.
  45. Kaplan R.S. (2009), Risk Management and the strategy execution system, Harvard Business Review, 11(6), pp. 1-6.
  46. Kaplan R.S. and Norton D.P. (2008), Mastering the Management System, Harvard Business Review, 86(1), pp. 62-77.
  47. Knight K.W. (2006), Risk Management. A journey… not a destination. Retrieved from http://en.mgubs.ru/images/Image/A%20Journey%20Not%20A%20Destination.pdf.
  48. Kunreuther H. (2006), Risk and reaction. Harvard International Review, 28(3), pp. 38-42.
  49. Lajili K. and Zéghal D. (2005), A Content Analysis of Risk Management Disclosures in Canadian Annual Reports, Canadian Journal of Administrative Sciences, 22(2), pp. 125-142, DOI: 10.1111/j.1936-4490.2005.tb00714.x
  50. Liebenberg A.P. and Hoyt R.E. (2003), The determinants of Enterprise Risk Management: evidence from the appointment of Chief Risk Officers, Risk Management & Insurance Review, 6(1), pp. 37-52, DOI: 10.1111/1098-1616.00019
  51. Linsley P.M. and Shrives P.J. (2000), Risk Management and Reporting Risk in the UK, The Journal of Risk, 3(1), pp. 115-129.
  52. Linsley P.M. and Shrives P.J. (2005), Transparency and the disclosure of risk information in the banking sector, Journal of Financial Regulation and Compliance, 13(3), pp. 205-214, DOI: 10.1108/13581980510622063
  53. Linsley P.M. and Shrives P.J. (2006), Risk reporting: A study of risk disclosures in the annual reports of UK companies. The British Accounting Review, 38(4), pp. 387-404, DOI: 10.1016/j.bar.2006.05.002
  54. MacGillivray B.H., Sharp J.V., Strutt J.E., Hamilton P.D. and Pollard S.J.T. (2007a), Benchmarking risk management within the international water utility sector. Part I: design of a capability maturity methodology, Journal of Risk Research, 10(1), pp. 85-104, DOI: 10.1080/13669870601011183
  55. MacGillivray B.H., Sharp J.V., Strutt J.E., Hamilton P.D. and Pollard S.J.T. (2007b), Benchmarking risk management within the international water utility sector. Part II: a survey of eight water, Journal of Risk Research, 10(1), pp. 105-123, DOI: 10.1080/13669870601011191
  56. Malone D., Fries C. and Jones T. (1993), An Empirical Investigation of the Extent of Corporate Financial Disclosure in the Oil and Gas Industry, Journal of Accounting, Auditing and Finance, pp. 251-273.
  57. McNabb D.E. (2005), Public Utilities for the 21st century. (Northampton, MA: Edward Elgar).
  58. Menozzi A. (2009), Board of directors in the Italian public utilities. (Milano: Giuffrè).
  59. Mikes A. (2009), Risk management and calculative cultures. Management Accounting Research, 20, pp. 18-40, DOI: 10.1016/j.mar.2008.10.005
  60. Mikes A. (2010), Becoming the Lamp Bearer: The Emerging Roles of the Chief Risk
  61. Officer, in Fraser J. and Simkins B.J. (Eds), Enterprise Risk Management. Today’s leading research and best practices for tomorrow’s executives. Kolb Series in Finance. (Chichester, Wiley).
  62. Modica S. and Rustichini A. (1994), Awareness and partitional information structures, Theory and decision, 37(1), pp. 107-124, DOI: 10.1007/BF01079207
  63. Neu D. (1991), Trust, impression management and the auditing profession, Critical Perspectives on Accounting, 2(4), pp. 295-313, DOI: 10.1016/1045-2354(91)90015-6
  64. Neu D., Warsame H.A. and Pedwell K.A. (1998), Managing public impressions: Environmental disclosures in annual reports, Accounting, Organizations and Society, 23(3), pp. 265-282, DOI: 10.1016/S0361-3682(97)00008-1
  65. Oliveira J., Rodrigues L.L. and Craig R. (2011), Risk-related disclosures by nonfinancial companies: Portuguese practices and disclosure characteristics, Managerial Auditing Journal, 26(9), pp. 817-839, DOI: 10.1108/02686901111171466
  66. Paladino B. (2008), Strategically managing risk in today’s perilous markets, Strategic Finance, November, pp. 27-33.
  67. PricewaterhouseCoopers (2009), Critical imperatives for the modern utility industry: Strategic vision, transparency, accountability, and agility will determine the success of power and utilities companies. Retrieved from http://www.pwc.com/us/en/industry/ utilities/publications/critical-imperatives-utilityindustry.jhtml.
  68. Rahardjo K. and Dowling M.A. (1998), A broader vision: strategic risk management, Risk Management, 45(9), pp. 44-49.
  69. Ranalli F., Calabro A., Torchia M. (2011), Ownership and control in local public utilities: the Italian case, Journal of Management and Governance. DOI: 10.1007/s10997-011-9206-1
  70. Renn O. (1998), Three decades of risk research: accomplishments and new challenges, Journal of Risk Research, 1(1), pp. 49-71, DOI: 10.1080/136698798377321
  71. RMRDP (2002), Risk Management Maturity Level Development. Retrieved from http://www.pmi-switzerland.ch/fall05/riskmm.pdf.
  72. Roulstone D.T. (1999), Effect of SEC Financial Reporting Release No. 48 on Derivative and Market Risk Disclosures, Accounting Horizons, 13(4), pp. 343-363, DOI: 10.2308/acch.1999.13.4.343
  73. Rutherford B. (2003), Obfuscation, textual complexity and the role of regulated narrative accounting disclosure in corporate governance, Journal of Management and Governance, 7, pp. 187-210, DOI: 10.1023/A:1023647615279
  74. Samson C., Neri L., Bini L. and Giunta F. (2011), Neutrality in management reports: a corpus analysis of FTSE MIB companies’ Performance and Risk Reviews. Paper presented at the Accounting Renaissance Congress, Venice 4-5 November 2011.
  75. Santhosh A. and Cox P. (2007), Analysing the determinants of narrative risk information in UK FTSE 100 annual reports, The British Accounting Review, 39 (3), pp. 227-248, DOI: 10.1016/j.bar.2007.06.002
  76. Shaw J. and Lewis G. (2006), ERM in motion, Risk Management Magazine, 53(7), pp. 24-32.
  77. Shortreed J. (2010), ERM Frameworks, in Fraser J. and Simkins B.J. (Eds), Enterprise Risk Management. Today’s leading research and best practices for tomorrow’s executives. Kolb Series in Finance. (Chichester, Wiley).
  78. Silverman D. (2001), Interpreting qualitative data. Methods for Analysing Talk, Text and Interaction. 2nd Edition. (Thousand Oaks: Sage).
  79. Solomon J.F., Solomon A., Norton S.D. and Joseph N.L. (2000), A Conceptual Framework for Corporate Risk Disclosure Emerging from the Agenda for Corporate Governance Reform, The British Accounting Review, 32(4), pp. 447-478, DOI: 10.1006/bare.2000.0145
  80. Walker V.R. (1998), Risk regulation and the “faces” of uncertainty, Risk: Health, Safety & Environment, 9, pp. 27-38.
  81. Young P.C. and Tippins S.C. (2001), Managing Business Risk: An Organization-Wide Approach to Risk Management. (New York: Amacom).

  • Managing cyber risk in the financial sector: Insights from a case study Chiara Crovini, Pier Luigi Marchini, in FINANCIAL REPORTING 1/2023 pp.97
    DOI: 10.3280/FR2023-001004
  • Risk management and firm size: a survey of Italian private companies Elisabetta Mafrolla, Felice Matozza, in MANAGEMENT CONTROL 3/2015 pp.87
    DOI: 10.3280/MACO2014-003005
  • Controllo della performance nelle aziende dei servizi: contributi e tendenze Selena Aureli, Claudio Travaglini, in MANAGEMENT CONTROL 2/2017 pp.5
    DOI: 10.3280/MACO2017-002001
  • Is risk reporting a possible link between financial and management accounting in private firms? Chiara Crovini, Giovanni Ossola, in FINANCIAL REPORTING 1/2021 pp.29
    DOI: 10.3280/FR2021-001002

Selena Aureli, Federica Salvatori, Investigation of risk management and risk disclosure practices of Italian listed local utilities in "FINANCIAL REPORTING" 1/2013, pp 121-167, DOI: 10.3280/FR2013-001006