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Home , Accountability, Social responsibility

“ and : the First Empirical of a Theoretical Model applied on Italian Public Sector”.

Massimo Pollifroni, University of Turin

ABSTRACT The central part of the paper develops a law rather than accounting academics. Theoretical Model that links the However, it has been argued that more instruments of Corporate Social from an accounting perspective is Responsibility disclosure, to the Public needed in order to measure performance. activities oriented to the e-citizens behaviours The public sector is under a wave of and to the e-government processes. changes due to the so called New Public The architecture of the Model identifies the Management, which stresses the fact the Structure of the Excellent Public Institutions public agencies should operate efficiently, in function of a series of variables: adopting devices that come from the private Instruments of Public Sector Social sector, taking into account the specific cultural Responsibility; Development of the e- (national and regional) and organizational path government processes; and Development of dependence. The management of the public the e- processes. sector requires informational and decisional The final part of the paper is dedicated to processes, as well an monitoring process, that illustrate the first empirical evaluations of the operate more effectively. Efficiency, research and the following steps of the work. effectiveness and creation are concepts and goals traditionally used in the private INTRODUCTION companies that should also be pursued by public agencies, taking into account the The information technology revolution has different missions of the two types of had a great impact on the various sectors of corporate entities (D’Alessio, 1989, 1997; the . By means of ad Anselmi, 1995; Borgonovi, 1996). hoc laws, the Italian government, along with The rationality of the decision-making the other European Countries, has started up process, an adequate planning and monitoring a modernization process of the State’s system, the separation between policymakers administration, inviting the Public and top management, a high quality of Administration to follow development corporate disclosure are all tools that guidelines with the objective of creating a contribute to pursue corporate efficiency and harmonious growth in the information , that are a sin qua non for an process with regards to the structures and effective towards activities linked to it. By these innovative community (Farneti, 2000). Following these processes accountability will be particularly drivers the paper develops a Theoretical relevant in the public sector. Business Model that links the instruments of Since corporate resources are Corporate Social Responsibility disclosure, to provided, either directly or indirectly, by the the Public activities oriented to the e-citizens paid by citizens, senior management behaviors and to the e-government processes: should be held accountable to them. the architecture of the Model is explained in Accountability is also meant in relation with the following paragraphs. performance. Traditionally, in Italy accounting practices in public sector have been studied by

2006 Proceedings of the Midwest Business Association 19

people who will act on motives superior to their own immediate interest. Keeping the law, respecting human THE FUNDAMENTAL CONCEPTS and property, loving one's family, fighting to defend national goals, helping the unfortunate, paying taxes. Before analyzing the architecture of the All these depend on the individual virtues of courage, Model, it is necessary to introduce - briefly - loyalty, charity, compassion, civility, and duty the following fundamental concepts: (…)”(Colson, 1989). - ; The general ethical standards of - (or Ethics in Business); apply to people in professions such as - Corporate Social Responsibility. medicine and accounting just as much as to Ethics1 is derived from the Greek anyone else. However, society places even ethikos, meaning character. Issues of personal higher expectations on professionals. character, and the search for the best patterns People need to have confidence in the for living, were at the core of Greek ethical quality of the complex services provided by philosophy. In contrast, moral is from the professionals. Because of these high Latin more. The Romans used this term to expectations, professions have adopted codes describe the customary ways that people of ethics, also known as codes of professional tended to act. Thus, though the two terms are conduct. These ethical codes call for their often used interchangeably today, morality has members to maintain a level of self-discipline evolved to mean the social norms that people that goes beyond the requirements of laws are taught and conditioned to follow, while and regulations. Therefore the purpose of ethics has come to refer to the rational ethics in business is to direct business men and investigating and questioning of these norms. women to abide by a that Ethics is the study of questions of facilitates, if not encourages, public morality, the search to understand what is confidence in their products and services. The right, wrong, good, and bad. It is the branch main reason for having ethical guidelines is to of philosophy that systematically studies aid in the decision-making process for moral ideals and goals, motives of choice and situations that involve ethical questions. patterns of good and bad conduct. This view Ethics in Business is of utmost of ethics is said to be normative, since it importance to accounting professionals and assumes the existence of at least some those who rely on their services. Certified Public universal moral principles and standards. Accountants (CPAs), and other accounting Ethical values provide the foundation on professionals, know that people who use their which a civilized society exists. Without the services, especially decision makers using foundation, civilization collapses and financial statements, expect them to be highly 2 unethical behavior will destroy a firm’s ability competent, reliable, and objective . Those to make money. Although the goal of any firm who work in the field of accounting must not should be to increase its owners’ wealth, to do only be well qualified but must also possess a so requires the public’s . high degree of professional integrity: a In considering the impact of ethical professional’s good reputation is one of the values on a society, Chuck Colson made the most important possessions. following observation: “(…) are The concept of Business Ethics is tragically vulnerable when the men and women who directly linked to the theme of Corporate Social compose them lack character. A nation or a culture Responsibility (Rich, 1993). The corporate cannot endure for long unless it is under girded by organization has an ethical outline when - not common values such as valor, respect for others and for only - it respects the laws, but it also manages the law; it cannot stand unless it is populated by its own business respecting the interest of the various stakeholders: in the business ethics are

2006 Proceedings of the Midwest Business Economics Association 20 included the themes of the governance and of upon which the definition of the “ethical rules” the accountability (Parmigiani, 2002). to be followed depend and various formulas The Corporate Social Responsibility are being proposed [AEI Standard Ethics, demands to the corporate system to promote 2005 (January)]. the social as regards the social In general terms – and it has to be cohesion. The European Commission defines pointed out that any simplification is the Corporate Social Responsibility (CSR) as obviously reductive and that there are many “(…) the voluntary decision to contribute to the instances of contamination amongst the progress of the society and to the defence of the various models – the most widely adopted environment, integrating social and environmental approach is the “subjective” one whereby the problems into the corporate operations and the company which is interested in taking on interactions with the stakeholders (…)” (European commitments towards the social sphere and Commission, 2001). In accordance with the the environment prepares an “ethical” economic approach, acting in a social way document (usually a code or a charter) laying means maximizing the value taking into down the principles drawn up by the company consideration the effects induced on their itself or by its consultants. These consultants, , by increasing the intangible the various study centres, the auditing assets, reducing the negative effects (such as companies then work out the level of social pollution, waste, etc.), and showing up to responsibility and propose solutions on the advantage the positive ones (such as basis of the guidelines provided by their , welfare, etc.). customers. The notion of corporate ethics or, A second approach is the better still, Corporate Social Responsibility identification of ethical principles through (CSR), was recently developed by negotiations with stakeholders. In this case, international institutions. It originated from principles and objectives are not drawn up the old type of ethical finance which goes according to pre-set guidelines but are the back to the beginning of the XX century and outcome of a compromise between external is now called Sustainable Finance or Socially parties and the company [the theoretical Responsible Investments (SRI) [AEI Standard reference to this approach is the “Stakeholder Ethics, 2005 (January)]. From an institutional Theory”, (Friedman, 1962)]: this approach has point of view, CSR was initially discussed by been widely studied and is widely appreciated the United Nations and subsequently by the academic world3. developed by the Organization for Economic A third approach, identifiable amongst Cooperation and Development (OECD) and the recommendations made by the European the European Union. Some national Commission (European Commission, 2002)4. governments have recently started to issue It is the voluntary approach which, even guidelines on CSR. though it is not standardized, has to take full Corporate Social Responsibility is a account of the principles laid down by the UN voluntary commitment undertaken by a and the OECD, primary sources for useful company (or a public institution) to contribute guidelines for the definition of the concept of to the improvement of the environment and corporate ethics. society (European Commission, 2001). Today, The most important reason for this the final definition of such commitment and approach is the European Commission’s the responsibilities it entails are established by determination to contain the spread of the companies (or the public institutions) with choices which are too far away from the social different methods. In the world of Corporate guidance established at international level. Social Responsibility or sustainable and This is also shown by the implicit willingness responsible finance, there are many instances to enhance the strategic guidance function of

2006 Proceedings of the Midwest Business Economics Association 21 the “res pubblica” system - the common duties of the Public Institution, a charter that government and the law - in relation to social defines the ethical-social responsibility of each and development issues and avoid the member: it is a valid means to prevent creation of too many “ethics” with limited irresponsible and illegal behaviors made by reach at the service of different national and people who act in the name of the Public local interests, individual companies or Institution, because it introduces a clear and stakeholders [AEI Standard Ethics, 2005 explicit definition of the ethical and social (January)]5. responsibilities of their managers and employees towards the different groups of THE ARCHITECTURE OF THE MODEL stakeholders. The is usually developed on four levels: a) the general ethical The instruments of the Model can be principles; b) the ethical rules; c) the ethical classified into three main groups (or clusters) standards of behavior; and d) the internal (see Table 1): sanctions. The ethical committee is an internal 1) actions with main impact on the internal processes with the task: to give currency to the of the Public Institutions; knowledge and the comprehension of the 2) actions with main impact on the external relations ethical code, to control the real of the Public Institutions; implementation of the principles contained in 3) actions with bivalent impact on the internal the document, to receive notices about the processes/external relations of the Public violations, to make investigation and to Institution. establish sanctions. 1) Actions with main impact on the internal Creation of an internal ethical , presided processes of the Public Institutions. over by an ethical officer. The activity of internal The actions with main impact on the internal ethical audit is an extension of the traditional processes of the Public Institutions, are: activities of auditing and it is aimed at - expression of the ethical view of the controlling the ethics of behaviors and Public Institution (or mission); processes. This activities is usually - promulgation of the ethical code from an coordinated by the ethical officer who is the ethical committee; person responsible of the ethical matters - creation of an internal ethical audit, inside the Public Institution (such as presided over by an ethical officer; promulgation of the ethical code, creation of - realization of activities concerning ethical an internal ethical audit, realization of training; activities concerning ethical training, etc.). - Social and Environmental Accountability Realization of activities concerning ethical and Auditing. training. The activity of ethical training, is the Expression of the ethical view of the Public combination of activities that develop the Institution (or mission). The ethical view (or ability to recognize, to analyze and to solve mission) states purposes and fundamental the ethical dilemma in the Public Institution aims that the Public Institution wants to through philosophical, economic, legal pursue and the consequences that it intends to instruments: it is addressed to the decisional generate through its institutional activities: so, actor to communicate and create shearing the ethical view (or mission) is fundamental about the values and principles of the ethical guide in the strategic choices of the Public code (CELE, 2004). Institution. Social and Environmental Accountability Promulgation of the ethical code from an and Auditing. As far as Social and ethical committee. The ethical code is a kind of Environmental Accountability is concerned “Constitutional Charter” of the rights and moral there are different kinds of applications (e.g.,

2006 Proceedings of the Midwest Business Economics Association 22 SA8000 Standards6; ISO14001 Standards7; as well as its orientation in corporate decision- EMAS Standards8). making, management approach, and their 2) Actions with main impact on the external outcomes and impacts; illustrating the goals relations of the Public Institutions. for continuous improvement which the The actions with main impact on the company intends to follow; providing details external relations of the Public Institutions, on interactions between the company and its can be classified into: surrounding environment; showing value a) Instruments of Ethical-Social Reporting; added and how it is allocated. b) by Ethical Standards. The sections of the Social Report are a) Instruments of Ethical-Social Reporting. the following (GBS, 2001): The ethical-social reporting of - the corporate identity, which entails a corporate social responsibility uses some description of the structure, the instruments of different kinds: mission, the framework of ethical values, - Final reporting such as, e.g., the Corporate and the strategy; Social Responsibility Report (or Social Report), - the creation and allocation of value added, the Environmental Balance (or Eco-balance) representing the main connection with the and the Gender-Sensitive Budget; statutory financial statements and which - Preventative reporting such as, e.g., the highlights the company’s economic (or Sustainable Development Report. economically quantifiable) impact on the Final reporting. The Corporate Social main categories of stakeholders; Responsibility Report (or Social Report), provides - the part entitled the social account, additional information to that given in the summarizing the results achieved in more traditional reports, providing relation to the commitments, plans and stakeholders with details about the social impacts on the individual stakeholders. impact of the company's decisions (GBS, The most important ratio contained in 2001)9. Information about the company’s the document is the value added. Value added performance to be made public measures the wealth generated by the simultaneously expands investors’ window of company during the year for the stakeholders choice and increases the approval and the to which such value added is allocated. The involvement of the general public, enabling profit and loss account figures are reclassified companies to strengthen their reputation. This to show the creation of value added and its report also provides management with the allocation to the stakeholders. The allocation necessary information to assess and verify the process also considers the actual distribution results obtained, useful for identifying of the net result for the year10. Value added is strategies with which to approach the social represented in two different tables (the two field. Social reporting has the following tables balance each other): objectives: to provide all stakeholders with a - the Table for the Calculation of Value Added, comprehensive picture of the company’s identified by comparing interim revenues performance, establishing an interactive social and costs (see Table 2); communication process; to provide relevant - the Table showing the Allocation of Value information on the company’s operations in Added being the summation of the order to broaden and improve stakeholder’s remuneration received by stakeholders awareness and ability to evaluate and make within the company and the donations choices, also from an ethical-social standpoint. (see Table 3). This means: describing the company’s The part of the Social Report entitled identity and the basic values which the the social account contains the qualitative and company has applied in preparing the report, quantitative description of the company’s

2006 Proceedings of the Midwest Business Economics Association 23 results in relation to its commitments, the The Gender-Sensitive Budget (or Gender deployment of plans and the impact on the Budgets, Women’s Budgets and Women’s Budget individual stakeholders (GBS, 2001). Statements) refers to a variety of processes and In addition to the financial results – as tools aimed at facilitating an assessment of the per the statutory financial statements and gendered impacts of government budgets. In previously shown in the table of value added – the evolution of these exercises, the focus has the company generates other benefits for its been on auditing government budgets for stakeholders which the document will now their impact on women and girls14. This has identify and analyze using measurements and meant that, to date, the term Women’s Budget comparisons, description, illustrative tables, has gained widest use. Recently, however, evidence and reports, and any other means these budget exercises have begun using enabling the construction of an gender as a category of analysis so the comprehensive picture. In addition to those terminology Gender-Sensitive Budgets is effects the company can accurately pinpoint, increasingly being adopted. It is important to there are other directly and indirectly recognize that Women’s Budgets or Gender- generated impacts, of which the company may Sensitive Budgets are not separate budgets for be aware to various degrees. These relate to women, or for men. They are attempts to various groups of stakeholders. The account break down, or disaggregate, the should enable the various subgroups of the government’s mainstream budget according to general public to become aware of what the its impact on women and men, and different company has generated and to establish more groups of women and men, with cognizance solid and satisfying relations therewith. The being given to the society’s underpinning social account must be presented as structured gender relations (Sharp, 1999). information which makes reference to the Preventative reporting. The Sustainable framework of the identity statement (values, Development Report provides a framework for mission, strategies and policies) and to the with emphasis on the other stakeholders, giving the reader the linked aspects of an organization’s opportunity to assess the extent to which the environmental, social, and economic aspects. statement has been implemented and According to the definition of the World observed and thus enabling an overall Commission on Environment and evaluation of corporate conduct11,12. Development (WCED) “(…) a development is The Environmental Balance (or Eco- considered to be sustainable if it meets the needs of the balance) means companies expressing in present without compromising the ability of future quantitative terms that are as clear as possible generations to meet their own needs15 (…)”. the environmental performance of their The Sustainable Development Report in operations, comparing data about the Government presents information about the way environmental burden of inputs to data about in which Government Departments and their outputs: this document is the final part of the executive agencies manage their land, environmental impact study and assessment buildings and staff. It does not set out to which compares environmental costs and provide comprehensive data on each benefits on the basis of homogeneous criteria Department's operational performance since (Scandurra et al, 1995). This document such information is more appropriately concerns: Environmental management and provided at Departmental level. What it management systems; Training and provides is a snapshot of the way in which ; Environmental performance Departments have performed in areas covered indicators; Use and consumption of energy by the targets and commitments in the and non-recyclable materials13. Framework for Sustainable Development on the Government estate.

2006 Proceedings of the Midwest Business Economics Association 24 b) Evaluation by Ethical Standards. The concept of e-government (or e- The evaluation of ethical standards administration) is referred to the use of and requirements for Public Institution is modern Information and Communication performed on the basis of parameters. The Technologies (ICT) linked to the first parameter (or source of law) is the development of electronics and the Internet in Universal Declaration of Human Rights of the the modernization process of the Public United Nations. This parameter is then Administration (Pollifroni, 2003). The followed by dozens of Pacts, Declarations, different processes of e-government may be Agreements, Resolutions adopted and entered analyzed with reference to the various models, into by the United Nations and, as has already that the Public Institution may adopt during been stated, on the subjects of economic the modernization process of the structure. development, employees’ rights and European The different e-government models are: law, by the International Labour Organisation - G2C model (Government to Citizen model): this (ILO), the Organisation for Economic model concerns the activities carried out Cooperation and Development (OECD) and by the Public Institution towards own the European Union (EU). The ethical citizens (e.g. to build Institutional Portal evaluation of states favours those nations Web and to provide Internet on line which are governed by regimes of proven services such as the presentation of the people’s democracy which respect the highest Individual Return in electronic requirements in terms of: human rights; format, or the application of electronic environmental legislation and policy; relations documents by the Registry Offices, etc.). with developing countries; sustainability of - G2B model (Government to Business model): economic structures; level of formal and this model concerns the activities carried substantive democracy and security policy. out by the Public Institution towards own The Agenzia Europea di Investimenti (AEI) business companies (e.g. to provide Standard Ethics is an Italian example of Internet on line services such as the company that provides in corporate valuation presentation – in electronic format - of the by Standard Ethics16. The final evaluations by following documents: Income Tax Return, AEI Standard Ethics on the level of Annual Report, etc). conformity of companies and Nations (or - B2G model (Business to Government model): Public Institution) to the baseline ethical this model concerns the activities carried values are expressed with eight different out by the Public Institution towards own Ratings: EEE; EEE-; EE+; EE; EE-; E+; E; external supplier (e.g. e-procurement E-. “EEE” stands for ‘above average’, “EE” for activities, e-auctions on line, etc.; in Italy ‘average’ and “E” for ‘below average’ (see Table these activities are made by Consip S.p.A., 4). Those Nations (or Public institution) and a Public Company of the Italian Treasury companies which do not comply with the Department). values expressed by the United Nations do - G2E model (Government to Employees model): not receive ratings and are included amongst this model concerns the activities carried the “suspended” issuers [AEI Standard Ethics, out by the Public Institution towards own 2005 (February)]. employees (e.g. to provide Internet on line 3) Actions with bivalent impact on the internal services such as e-learning activities). processes/external relations of the Public Institution. - G2G model (Government to Government model): The actions with bivalent impact on this model concerns the activities carried the internal processes/external relations, are out by the Public Institution towards other represented by the current e-government/e- Domestic Public Institution (electronic governance processes. integration between several Departments

2006 Proceedings of the Midwest Business Economics Association 25 or between Central and Local Public c) and Development of the e-governance Institution) or towards other International processes (K). or Foreign Public Institutions (e.g. The Instruments of Public Sector intelligence activities, International Co- Social Responsibility (X) are the first variable operation actions, etc.). (or driver) of the Theoretical Business Model The development of the e- illustrated in the present research. The government processes (conditioning processes illustrated actions with main impact on the internal or causes) determines an improvement in the processes of the Public Institutions (1) and the ones governance processes of the Public Institution with main impact on the external relations (2), that - using highly technological solutions - contain the first variable of the Model (this are named e-governance processes variable can be called “Social Leverage”). While (conditioned processes or effects) (see Figure the illustrated actions with bivalent impact on the 1). Consequently, the e-governance is the internal processes/external relations (3), contain the second aspect of technological innovation second variable (J = Development of the e- applied to Public Administration processes: government processes) and the third variable that is to say the possibilities for the of the Model (K = Development of the e- improvement of the democratic participation governance processes). processes offered by the new technologies. The paper draws conclusions by the These e-governance processes include, for first empirical evaluations of the research. In example: direct participation of the employees these months our Department is testing the to the internal decision of the Public Model on a statistical selected sample of Institution: these processes influence the Italian Local Public Institutions (202 internal governance with activities, e.g., of Municipalities). The empirical applications internal electronic poll (e-decision); direct have used the following steps: to analyze participation of the citizens to the political annual reports, to prepare questionnaires, to choices: these processes influence the external administer questionnaires, to analyze data and governance of the Public Institution with to integrate findings. The research has tried to activities, e.g., of e-voting; this is the so called extract the Excellent Public Institution that digital democracy (or e-Democracy). eDemocracy - uses - at the same time - the three drivers [X the use of ICT to promote and support the = Instruments of Public Sector Social democratic process - was reported still to be Responsibility; J = Development of the e- in its infancy and many relevant processes government processes; K = Development of involved need upgrading. eDemocracy made a the e-governance processes]: only 9 positive contribution in facilitating democratic Municipalities (4%), over 202, have used the renewal and improving citizen participation. three drivers at the same time. How the table However, it was also recognized as just one shows (see Table 5), the extracted Local element of participation and needed to be Public Institutions (9) have excellent ratios, seen within the context of a wider agenda for better than the full selected sample (202). If democratic renewal and citizenship (Deloitte- the first results are very encouraging, the Eurocities, 2004). Concisely the architecture following steps of the research will be: to of the Model has identified the Structure of develop and to improve the instruments used the Excellent Public Institutions in function in the empirical applications (especially the of a series of variables: questionnaires and the ratio analysis); to a) Instruments of Public Sector Social develop the analysis in several sectors (, Responsibility (X); Education, University, Transport, etc.) b) Development of the e-government including not only Local Public Institutions, processes (J); but also Central Public Institution; and to

2006 Proceedings of the Midwest Business Economics Association 26 realize activities in partnership with other Universities or Business Schools.

2006 Proceedings of the Midwest Business Economics Association 27 Tables and Figures

TABLE 1: Instruments of the Model

Actions of the Public Institution with main impact on the: A - internal processes : a) expression of the ethical view of the Public Institution (or mission); b) promulgation of the ethical code from an ethical committee; c) creation of an internal ethical audit, presided over by an ethical officer; E I X d) realization of activities concerning ethical training; N T e) Social and Environmental Accountability and Auditing, such as: T E - SA8000 standards; E R - ISO14000 standards; R N - EMAS standards. N A A L B - external relations: L a) Instruments of Ethical-Social Reporting, such as: R - Corporate Social Responsibility Report; P E - Environmental Balance (or Eco-balance); R O L - Gender-Sensitive Budget; O C A - Sustainable Development Report. T E b) Corporate valuation by Standard Ethics. I S O C - internal processes/external relations: S N e-Government processes (conditioning processes), included in its models E S S (G2C model; G2B model; B2G model; G2E model; G2G model)

e-Governance processes (conditioned processes)

2006 Proceedings of the Midwest Business Economics Association 28 TABLE 2: Table for the Calculation of Value Added (Source: GBS, 2001)

2006 Proceedings of the Midwest Business Economics Association 29 TABLE 3: Table for the Allocation of Value Added (Source: GBS, 2001)

2006 Proceedings of the Midwest Business Economics Association 30 TABLE 4: Nation Rating, evaluation by Standard Ethics [Source: AEI STANDARD ETHICS (Agenzia Europea di Investimenti Standard Ethics G.E.I.E.), (February 2005) and (July 2004), Nation Rating, Bruxelles, Reports, Bruxelles]

Ethic Rating 2005 2004 EEE DENMARK ICELAND NORWAY SWEDEN DENMARK ICELAND NORWAY SWEDEN EEE- AUSTRIA BELGIUM FINLAND FRANCE AUSTRIA BELGIUM FINLAND FRANCE GERMANY GERMANY IRELAND NETHERLANDS NEW IRELAND NETHERLANDS NEW ZEALAND SPAIN ZEALAND SPAIN UNITED KINGDOM UNITED KINGDOM EE+ AUSTRALIA CANADA AUSTRALIA CANADA GREECE ITALY LUXEMBOURG LUXEMBOURG PORTUGAL SWITZERLAND PORTUGAL REPUBLICA CECA SWITZERLAND HUNGARY EE CZECH REPUBLIC HUNGARY ITALY JAPAN JAPAN MEXICO POLAND SLOVAK REPUBLIC UNITED MEXICO POLAND SLOVAK REPUBLIC STATES UNITED STATES EE- BRAZIL BULGARIA ROUMANIA SOUTH BRAZIL BULGARIA ROUMANIA SOUTH AFRICA AFRICA E+ ARGENTINA SOUTH COREA TURKEY ARGENTINA SOUTH COREA TURKEY E RUSSIAN FEDERAT EGYPT ISRAEL INDIA RUSSIAN FEDERAT E- CHINA EGYPT INDIA CHINA

FIGURE 1: Relations between the E-Government Models and the E-Governance processes

E-GOVERNMENT MODELS (CONDITIONING PROCESSES) G2E

Public Employees G2C

PUBLIC SECTOR Citizens G2G

G2B B2G

Business

E-GOVERNANCE (CONDITIONED PROCESSES)

2006 Proceedings of the Midwest Business Economics Association 31 TABLE 5: The first empirical evaluations of the research

ACID-TEST-RATIO CAPITAL NET WORTH VALUE ADDED Positive Ratio Negative Ratio Positive Ratio Negative Ratio Positive Ratio Negative Ratio Examinated Local Public Institutions (n. 202) RATIOS 202 38 18,81% 164 81,19% 129 63,86% 73 36,14% 131 64,85% 71 35,15% Extracted Local Public Institution that use the three Model-Drivers (n. 9)

RATIOS 9 8 88,89% 1 11,11% 9 100,00% 0 0,00% 9 100,00% 0 0,00% PERFORMANCES 372,51% -86,31% 56,59% -100,00% 54,20% -100,00%

2006 Proceedings of the Midwest Business Economics Association 32 References

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2006 Proceedings of the Midwest Business Economics Association 33 Vermiglio F. (1983), La responsabilità sociale dell’impresa, Industria Poligrafica della Sicilia, Messina. Zamagni S. (2003), La responsabilità sociale dell’impresa: presupposti etici e ragioni economiche, in L’impresa giusta. Responsabilità e rendicontazione sociale nella cooperazione, Il Ponte Editore, Perugia.

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Endnotes and can be applied to any size of organization or business across all industries. The standard, based 1 Source: www.ethics.org. largely on ILO conventions, sets basic standards for: , forced labour, health and safety, 2 For further information visit the web site of the freedom of association and the right to collective International Ethics Standard Board for bargaining, discrimination, disciplinary practices, Accountants (www.ifac.org). working hours, compensation.

3 The main theoretical references to this approach 7 SA8000 (Social Accountability 8000) is an are: Friedman M. (1962), Capitalism and Freedom, international standard ISO14001 (or EN ISO University of Chicago Press, Chicago; Freeman E. 14001) is a series of environmental management R. (1984), Strategic Management. A Stakeholder standards promulgated by the International Approach, Pitman, Boston; Carroll A. C. (1993), Organization for Standardization (ISO - Business & Society. Ethics and Stakeholder Management, International Organization for Standardization is a South Western, Cincinnati. network - a non-governmental organization - of the national standards institutes of 148 countries, on the 4 This document follows the Guidelines for basis of one member per country, with a Central Multinational Enterprises, written by the OECD in Secretariat in Geneva, Switzerland, that coordinates 1976. the system. These standards comprise environmental management systems, environmental 5 The main Italian academic references on Ethics in , environmental labelling and environmental Business topics, are: Vermiglio F. (1983), La performance assessments. The ISO14001 standard responsabilità sociale dell’impresa, Industria Poligrafica for environmental management systems is della Sicilia, Messina; Terzani S. (1984), Responsabilità becoming an increasingly common requirement for sociale dell’azienda, in Rivista Italiana di Ragioneria ed doing business in Europe and other regions. Economia Aziendale, luglio-agosto, 1984; Matacena A. Environmental audits are conducted to determine, (1984), Impresa e ambiente: il bilancio sociale, Clueb, based on objective evidence, whether a company is Bologna; Coda V. (1989), Etica e impresa: il valore in compliance with environmental standards dello sviluppo, in Corno F. (a cura di), Etica e impresa: required by law, or its own environmental policies scelte economiche e crescita dell’uomo, Cedam, Padua; and goals. Sacconi L. (1991), L’etica degli affari. Individui, imprese e mercati nella prospettiva di un’etica razionale, Il 8 The EMAS (Eco-Management and Audit Scheme) Saggiatore, Milan; Cafferata R. (1995), Sistemi standard allows voluntary participation in an ambiente e innovazione. Come si integrano la continuità e il environmental management scheme for mutamento nell’impresa, Giappichelli, Turin; Nibale G. organisations operating in the European Union and (1995), L’etica aziendale, l’economicità aziendale e the European Economic Area. The scheme has l’economicità sociale, in Finanza, Marketing e Produzione, been operative since April 1995. It aims to promote n. 4; Lago U. (1995), L’etica nella gestione d’impresa, in continuous evaluation and improvements in the Economia e Management, n. 3; Rusconi G. (1997), Etica environmental performance of participating e impresa. Un’analisi economico-aziendale, Clueb, organisations. Both EMAS and EN ISO 14001 have Bologna; Zamagni S. (2003), La responsabilità sociale the common objective of providing for good dell’impresa: presupposti etici e ragioni economiche, in environmental management. However yet too often L’impresa giusta. Responsabilità e rendicontazione sociale they are seen as competitors. The EU Commission nella cooperazione, Il Ponte Editore, Perugia. has recognised that the International Standard for Environmental Management Systems, EN ISO 6 SA8000 (Social Accountability 8000) is an 14001, can provide a stepping stone for EMAS. The international standard for social accountability adoption of EN ISO 14001 as the management developed by Social Accountability International system element of EMAS will allow organisations to (SAI) through multi-stakeholder consultations. The progress from EN ISO 14001 to EMAS without objective of SA8000 is to ensure ethical sourcing of undue duplication of effort. goods and services. SA8000 is a voluntary standard

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- any comparisons (benchmark) which enable the 9 The most influential standards at an international reader to better evaluate the company’s level include, e.g.: performance. Benchmarks are only used if they - Account-Ability 1000, AA1000, 1999, ISEA come from official and public sources; (Institute for Social & Ethical Accountability); - the future improvement objectives, for both - The Copenhagen Charter, a Management Guide operations and substance; to Stakeholder Reporting, 1999, Ernst & - the opinions and reports of any third parties Young, PricewaterhouseCoopers, KPMG; engaged to assess the quality of operations or Huset Mandag Morgen; their compliance with the established - Sustainability Reporting Guidelines, 2000, GRI methodological commitments. (Global Reporting Initiative); - Voluntary Guidelines for CSR Reporting & 12 In April 2005 GBS has made a specific document Communication, 2000, CSR Europe; concerning a Social Report Model for the Public - European Commission 2001. Green book, Institutions (GBS, 2005). [18.7.2001 – COM/2001 – 366, also known as Green Paper on CSR]. 13 Other sources on the Environmental Balance (or Eco-balance), are: European Environment Agency 10 Value added can be either net or gross of (EEA); European Topic Centre on Catalogue of amortization/depreciation. Data Sources (ETC/CDS); U.S. Environmental Including amortization/depreciation it represents Protection Agency (U.S. EPA). the gradual reintegration of long-term production costs with the new wealth created. When this 14 In 1984, Australia was the first country to dimension is considered, the introduce a gender-sensitive budget as a pilot amortization/depreciation is allocated to the project. Although it is not clear from the literature company’s remuneration at the time of distribution. exactly what countries have attempted “to do” in preparing a gender budget, it appears that several 11 The fundamental elements of the social account are nations have moved or are moving in this direction: (GBS, 2001): Barbados, Fiji, Kenya, Mozambique, Namibia, - the description of the commitments or Philippines, South Africa, Sri Lanka, St. Kitts, objectives, and the rules of conduct (e.g. code Switzerland, Tanzania, Uganda, The United of conduct, corporate policies, operating Kingdom, Zambia and Zimbabwe (Unifem, 2000). procedures, quality manuals, etc.) which derive from the business identity; 15 Source: World Commission on Environment and - an identification of the stakeholders at which Development’s (WCED), [the Brundtland the social report is aimed; Commission, Report Our Common Future - the description of the policies in relation to (Oxford: Oxford University Press, 1987)]. each stakeholder category, the forecast results 16 and consistency of the stated values; The company, based in Bruxelles, is an Economic - the social reporting process , which enables the Interest European Group (EIEG) which aims at identification of the relation between objectives promoting company ethics, Corporate Social and outcomes related to company activity; Responsibility and Socially Responsible Investments. - the organized and complete description of The activities of the AEI Standard Ethics include events, quantitative and qualitative information, issuing ethical ratings to companies, Nation and comparisons, reports and, more generally, Public Institution. The “ethical” Ratings issued by information usefully in describing the relation AEI Standard Ethics is the result of statistical and between commitments and outcomes; scientific work carried out to take a snapshot of the - the opinions and feedback of stakeholders economic world in relation to ethical principles which are included in the social report in promoted by the large international organizations. compliance with the involvement principle;

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