TY - JOUR

T1 - Mandatory non-financial reporting in the banking industry

T2 - assessing reporting quality and determinants

AU - Schröder, Philipp

N1 - Publisher Copyright: © 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. Funding Information: This research was funded by the Open Access Publication Fund of the Leuphana University Lüneburg. The author appreciates the insightful comments made by two anonymous reviewers of this journal. The author also acknowledges the help of Sara Lindner (research assistant) for the support she extended to this research. Additionally, the author extends special thanks to the editor(s) of this journal for their timely feedback.

PY - 2022/5/18

Y1 - 2022/5/18

N2 - European companies that are larger than a specific size have had to comply with reporting requirements on non-financial topics since 2017 under the European Union's Non-Financial Reporting Directive (2014/95/EU), thereby making non-financial reporting (NFR) mandatory. To the best of the author's knowledge, no study has examined the quality of non-financial reporting in banks' compulsory reports over several years. Therefore, the unique objective of this study is to assess the non-financial reporting quality (NFRQ) in the mandatory NFR of the 100 largest banks operating in Germany over three years, and identify reporting-level determinants (experience, format, framework, and audit) that impact NFRQ. A novel framework is developed to measure NFRQ, and different statistical analyses are used to test hypotheses. This study provides notable results: (1) NFRQ in banks' mandatory reporting is below average despite displaying significant positive development over the years; and (2) banks' NFRQ is significantly impacted by three reporting-level determinants (experience, format, and framework). Additionally, this study highlights meaningful implications for theory, practice, and policy on the future of mandatory NFR in the EU.

AB - European companies that are larger than a specific size have had to comply with reporting requirements on non-financial topics since 2017 under the European Union's Non-Financial Reporting Directive (2014/95/EU), thereby making non-financial reporting (NFR) mandatory. To the best of the author's knowledge, no study has examined the quality of non-financial reporting in banks' compulsory reports over several years. Therefore, the unique objective of this study is to assess the non-financial reporting quality (NFRQ) in the mandatory NFR of the 100 largest banks operating in Germany over three years, and identify reporting-level determinants (experience, format, framework, and audit) that impact NFRQ. A novel framework is developed to measure NFRQ, and different statistical analyses are used to test hypotheses. This study provides notable results: (1) NFRQ in banks' mandatory reporting is below average despite displaying significant positive development over the years; and (2) banks' NFRQ is significantly impacted by three reporting-level determinants (experience, format, and framework). Additionally, this study highlights meaningful implications for theory, practice, and policy on the future of mandatory NFR in the EU.

KW - Management studies

KW - Banking

KW - Accounting

KW - CSR

KW - banks

KW - directive 2014/95/EU

KW - Germany

KW - mandatory

KW - Non-financial reporting

KW - reporting quality

UR - https://www.mendeley.com/catalogue/03474591-510a-3b05-8256-2327ba4bb3b1/

UR - https://www.tandfonline.com/toc/oabm20/current

UR - http://www.scopus.com/inward/record.url?scp=85130612020&partnerID=8YFLogxK

U2 - 10.1080/23311975.2022.2073628

DO - 10.1080/23311975.2022.2073628

M3 - Journal articles

VL - 9

JO - Cogent Business and Management

JF - Cogent Business and Management

SN - 2331-1975

IS - 1

M1 - 2073628

ER -