MANDATORY OBLIGATIONS AND VOLUNTARY DISCLOSURE OF ITALY’S LISTED COMPANIES

Directive no. 2003/51/EC of the European Parliament has established that the information should not be restricted to the financial aspects of the company's business. It is expected that, where appropriate, this should lead to an analysis of environmental and social aspects necessary for an understanding of the company's development, performance or position; hence, the level of disclosure depends on the legal framework. Lately, after the “modernization” of European accounting directives (2003/51/EC), the Italian Government has adopted Legislative Decree no. 32, 2nd February 2007, which requires to include in the Management Report, where appropriate, non-financial information relating to environmental and employee matters. The purpose of this paper is to examine if Legislative Decree no. 32, 2nd February 2007, in addition to firm’s characteristic factors (size, location, learning capacity, economic performance, board composition, etc.,), influence the voluntary disclosure practices of listed companies in Italy. A sample of 30 listed firms was examined using content analysis to determine the volume and the quality of disclosures. In a second step we tested the influences on disclosure of legal framework, industry and firms size. Results show that the legal framework have an effect all on the quality and quantity of voluntary item disclosed. Our results also provide evidence that factor directly associated with the amount of environmental, social and risk information disclosed is the level of compliance with mandatory disclosure