The effects of non-financial reporting legislation on human resource management practices and corporate governance in Germany and Poland. Analyzing the impacts of Directive 2014/95/EU
Final Report Abstract
There is a worldwide trend towards increased promotion of non-financial reporting (NFR) due to legislative pressures. This trend is especially prominent in the European Union (EU) that currently sets the pace with respect to mandatory regulations on NFR. Prominent examples of such legislation are the EU’s Non-Financial Reporting Directive (NFRD) or the more recent Corporate Sustainability Reporting Directive (CSRD). The implementation of such regulations in various EU member states poses important questions not only on the differences in effects of these laws on the scope and quality of disclosure by companies operating in various institutional contexts, but also on further outcomes in the form of specific organizational practices. The present project aimed at answering these questions through a number of qualitative and quantitative studies in the context of NFRD implementation in Germany and Poland, thereby focusing on human resource management (HRM) and corporate governance (CG) disclosure as well as actual organizational practices. For this purpose, the international research teams collected and analyzed data on non-financial disclosure by German and Polish enterprises listed on major stock exchange indices in both countries over the period from 2015 to 2019; that is, prior to and after 2017, when affected enterprises were mandated to publish their non-financial reports. Moreover, multiple qualitative interviews were conducted with company representatives in Germany and Poland, who were responsible for or involved in NFR activities. Our research showed that in both countries, the related legislation had a positive effect on both the scope and quality of disclosure. However, this effect was stronger in Poland than in Germany. This finding can be explained by the fact that German enterprises used to report extensively on non-financial matters prior to the NFRD, while Polish firms had to improve their NFR scope and quality rapidly in response to the related law. With respect to HRM and CG practices, our findings indicate that NFR legislation has provided an impetus towards changing traditional functional roles within organizations. Regarding the adoption of novel HRM and CG practices, both in Germany and Poland the NFRD is considered an important driver of organizational change, mainly through normative and mimetic mechanisms which added to the coercive power of the legislation.
Publications
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Non-financial reporting as a driver of sustainable HRM in Germany – A conceptual framework. Paper presented at the 2020 Herbstworkshop of WK Personal, Düsseldorf, Germany, September 2020.
Festing, M., Sahakiants, I., Steger, T., Ballnat, A. & Muster, M.
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Do legal regulations lead to greater disclosure of negative company information? The German CSR-RUG in the context of discrimination and corruption reporting. Paper presented at the 19th EIASM Workshop on Corporate Governance, Strasbourg, France, November 2022.
Muster, M.
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Does mandatory non-financial disclosure trigger sustainable HRM? A qualitative investigation. Paper presented at the Herbstworkshop of WK Personal, Berlin, Germany, September 2022.
Ballnat, A., Festing, M. & Sahakiants, I.
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Gaining legitimacy through gender pay equality reporting: Accounting for country- and organization-Level specifics in reputational façade-building. Paper presented at the Herbstworkshop of WK Personal, Berlin, Germany, September 2022.
Sahakiants, I., Aluchna, M. & Kaminski, B.
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Gender Pay Equality Reporting in Germany and Poland: An Econometric Investigation. Academy of Management Proceedings, 2022(1).
Sahakiants, Ihar; Aluchna, Maria & Kaminski, Bogumil
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The Role of Sustainable HRM in Promoting Corporate Sustainability. Academy of Management Proceedings, 2022(1).
Ballnat, Alexandra & Festing, Marion
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The HR Function and Mandatory Non-Financial Reporting: On the Road to Enhanced Sustainability?. Academy of Management Proceedings, 2023(1).
Ballnat, Alexandra; Festing, Marion; Sahakiants, Ihar & Steger, Thomas
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Legislative action and a propensity to report: HRM and corporate governance disclosure in Germany and Poland. Paper accepted for presentation at the 24th EURAM Annual Conference, Bath, UK, June 2024.
Aluchna, M., Kaminski, B., Muster, M., Roszkowska-Menkes, M., Sahakiants, I., Steger, T. & Wrzosek, M.
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Reputation Façade-Building through Non-Financial Disclosure: An Empirical Analysis of Gender Pay Equality Reporting. Journal of East European Management Studies, 29(3), 489-515.
Sahakiants, Ihar; Aluchna, Maria & Kamiński, Bogumił
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Translating the European Non-Financial Reporting Directive into organizational action—A comparative study in Germany and Poland. Paper accepted for presentation at the Academy of International Business (AIB) Annual Meeting 2024, Seoul, South Korea, July 2024.
Aluchna, M., Ballnat, A., Bohdanowicz, L., Festing, M., Jastrzebska, E., Roszkowska-Menkes, M., Sahakiants, I. & Steger, T.
