Environmental Social and corporate Governance framework for corporate disclosure in a multi-perspective dimension: a Multicriteria Dimension Analysis approach
Prof. Constantin Zopounidis, Assist. Prof. Alexandros Garefalakis, Assist. Prof. Christos Lemonakis, Ph.Dc Ioannis Passas
Purpose – The purpose of this paper is to provide to the Board of Directors and CEOs of a firm to be aware of and accountable for the information they provide to the public. As long as the quality of the companies’ public information is high, it will be able to retain its investors as well as to obtain new ones more easily.
Design/methodology/approach - This paper introduces a Multi-Criteria Decision Aid - MCDA tool with the use of the PROMETHEE II method to formulate an alternative aggregate ESG quality approach. We conduct comparisons in a sectorial and regional based perspective during different exam periods before and after the implementation of International Financial Reporting Standards (IFRS), in an attempt to provide a robust framework for corporate disclosure reporting.
Findings – The findings are of particular interest to both scholars and decision-makers, including providers of corporate governance indices and rating agencies. The innovation of this paper lies among others in using the MCDA method with the ESG framework, which proposes a combination of qualitative and quantitative criteria, enabling experienced and/or not experienced analysts to avoid manipulating techniques in business information.
Research limitations/implications - The sample of companies based on the US and European companies incorporating only large-sized ones.
Keywords ESG disclosures, narrative information, Management Commentary, Management Decision, Composite KPI’s, Ma.Co.Index, MCDA methods, Prometheé II.