Introduction and aim of research

The research aims to analyse the crisis risk assessments implemented by Municipal-Owned Companies (MOCs) and the disclosure provided by them about risk management reporting. Given the dependence of risk management system on the environmental and regulatory variables and on any professional guidelines, the aim is to evaluate whether forms of mimetic, normative and coercive isomorphism can be sought.

Over the years, local governments (LGs) have taken care of providing a series of activities, a supply that has gradually been decentralized through the assignment to companies controlled by them, identified in the literature as Municipal-Owned Companies (Voorn et al., 2017), with a view to better efficiency, better management of fiscal stress and better development of competition.

In this sense, the risk management system represents the key element on which to direct the risk of crisis. Referring to the Italian situation, the complex of crisis risk management and assessment activities is subject to disclosure through periodic reports, through the so-called “Relazione sul Governo Societario” (RGS) that is “Corporate Governance Report”.

Literature review on MOCs and Isomorphism

In the field of recent studies (Palermo, 2014), the research proposal focuses on the role of risk management reporting as an accountability tool. According to this line of research based on the new institutional theory, the search for legitimacy is pursued through compliance with the most widespread and recognized norms, rules and procedures according to the logic of "isomorphism" (DiMaggio et al., 1983; Meyer et al., 1977).

The research proposal focuses attention on the disclosure concerning the crisis risk management of the MOCs. The previous paragraph noted how the risk management system depends on environmental pressures, deriving from legislation and professional guidelines that aim to standardize and formalize organizational and communication processes, and on the internal characteristics of the entity, which instead tend to adapt the answer in relation to the company peculiarities. In the case of MOCs, a further variable arises represented by the presence of the public shareholder. The presence of a public shareholder contributes to generating tension between the need for organizational and economic autonomy, typical of companies, and for coordination, deriving from the assignment of public services.

With reference to the objective of the research, taking the mimetic isomorphism as a reference, it will be investigated whether the MOCs belonging to the same public group, i.e. referable to a common controlling partner LGs, tend to have RGS similar to each other. Considering the normative isomorphism, the assessment of the disclosure on the risk management system, in particular on crisis risk, will focus on the consistency with the guidelines of the CNDCEC or the MEF. Finally, taking the coercive isomorphism as a reference, it will be assessed whether the MOCs will tend to adapt the content of the RGSs following indications coming from the LGs or from the authorities with supervisory powers, such as the Court of Auditors or the auditor.

Methodology

The research is built on the Italian context and the analysis is conducted on a limited number of Italian municipalities, i.e., those with a population of more than 250,000 residents according to ISTAT 2022 data. There are 12 of them and the sample consists of 62 companies. The reference time horizon extends between 2018 and 2021: in this way it is also possible to make a time comparison on the variability of the data over the years.

Legislative Decree 175/2016 introduced the obligation to publish the “Relazione sul Governo Societario RGS” (RGS). In particular, in 2019 an initial guideline was published by the National Council of Chartered Accountants and Accounting Experts (CNDCEC) with the aim of assisting companies in implementing the risk management system and in preparing the related disclosure in the specific report. On January 2021, the Ministry of Economy and Finance published the “Indications on the Corporate Risk Assessment Programme”, after a public consultation.

To verify mimetic or normative isomorphism, RGSs results are tested with Anova. Normative isomorphism has been tested with reference to the time series results, focusing on the periods following introduction the CNDCEC and MEF guidelines. Mimetic isomorphism has been analysed comparing results among MOCs belonging to the same public group. In the RGSs no indications were detected on issues provided by authority with regulatory or supervisory power, so we have not test the coercive isomorphism.

Preliminary results and implications

From the first evidences it is possible to identify some initial results. Certain forms of isomorphism can be found, even if it is not possible to extend the results to all municipalities and companies. This study represents a contribution for public managers and practitioners but also for the literature itself. The first results suggest the need for more coordination among the LG groups, because managing the crisis risk should be felt as a phenomenon of the entire group and not only of the single MOC.

Theoretical approach: In the past decades, the New Public Management (NPM) philosophy has highlighted the importance of improving the efficacy of Public Sector Organizations (PSOs) management (Hood, 1995) by implementing innovative approaches based on private sector practices. Management reforms in the public sector have gradually focused on the governance of complex service delivery systems. This development has been described as a shift from NPM to New Public Governance (NPG) (Brignall et al.,2000), which identifies the primary governance dimension of modern PSOs in its citizen orientation, configuring a renewed perspective of public services. Indeed, the need for higher performance levels and improved outputs and outcomes has led researchers and practitioners to pay more attention to adequate Performance Measurement Systems (PMSs) to create a more efficient and transparent public sector (Lapsley, 1999; Aversano et al., 2018). Over the last 30 years, in Italy, these measures have led to profound changes in the management philosophies and administrative and accounting systems of PSOs, especially healthcare organizations (HCOs) (Tartaglia-Polcini et al., 2021).

Measuring and reporting performance is crucial in the healthcare system, where the environment is highly dynamic and unpredictable, making performance management more challenging (Peng et al., 2007). In healthcare, PMS should be examined considering the multiple and competing objectives pursued by HCOs (Purbey et al., 2007). HCOs engage in an activity with a high social impact and have a direct relationship with many stakeholder groups to whom it must account for the results achieved and the quantities and quality of public resources used (Bonollo & Zuccardi-Merli, 2016; Ippolito et al., 2022). HCOs use Performance Measurement Systems to manage existing processes and activities and to satisfy the increased information needs of the multiple HCOs’ stakeholders (Purbey et al., 2007; Elg et al., 2013).

Following the Resource Dependence Theory, the board and the managerial leaders represent the main actors able to adequately manage the uncertainty resulting from the organization’s dependence on the external environment in which it operates and from which it draws the necessary human, strategic and financial resources to survive (Reguera-Alvarado et al., 2017; Kilic & Kuzey, 2016).

This leads to a broader definition of Corporate Governance in HCOs (Eeckloo et al., 2004), in which board directors must adequately balance the need to maintain adequate levels of financial performance with the primary objective of caring for the well-being of their patients and the broader community in which they operate (Erwin et al., 2019; De Regge & Eeckloo, 2020).

Defining the most appropriate governance model represents a necessary step to allow for the needed restructuring process possible. Among the various aspects relevant to this purpose, gender diversity plays a relevant role. Given its importance as the primary governance mechanism (Kilic and Kuzey, 2016; Uyar et al., 2020), gender balance on boards of directors is widely supported by various national and international regulatory provisions and recommendations (Masselot & Maymont, 2015). In recent decades, European institutions and policymakers have promoted gender equality in management and strategic leadership positions, leading gender diversity to be included in the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development.

The presence of women in top management and governance roles of HCOs would be necessary because the dynamic and inclusive leadership and the diversity of knowledge and skills may represent a leading factor in improving financial performance (Reguera-Alvarado et al., 2017).

However, previous studies have mainly focused on the private sector (Al-ahdal et al., 2020; Naciti, 2019), while for the public sector, in particular the healthcare sector, there is still little empirical research conducted (Opstrup & Villadsen, 2015; Usman et al., 2018; De Reggee & Eeckloo, 2020).

Purpose: In light of the gap evidence above, In this study, we seek to understand how gender diversity affects the financial performance of HCOs through their governance mechanisms.

Thus our research question is: Is board gender diversity associated with greater financial performance in Italian healthcare organizations?

Methodology and data set: All Italian Public HCOs’ annual reports were analyzed to gather information about their performance, measured with economic, financial, and patrimonial balance indicators.

Thus, we estimated different OLS models to examine the association between women in top positions in Italian HCOs (roles of general, administrative, and health managers) and their financial performance.

Results and findings: Results indicate that a greater presence of women at the managerial level improves the financial and economic performance of the healthcare organizations analyzed. Results evidence that in HCOs' management and governance, women can represent a powerful lever for change.

Implications of the theory: The research aims to contribute to the debate on gender diversity in the governance of HCOs. In this sense, Italy represents an interesting context of investigation because, in the last 30 years, the Italian public and healthcare contexts have been affected by numerous policies inspired by the concept of NPM and NPG’s. The results could have practical implications to support the United Nation’s public policies toward stabilizing women in all decision-making positions. This research could be useful for standard-setters and practitioners to improve PMS by identifying performance indicators and governance dimensions. Academics could also benefit from this research to develop similar analyses in private HCOs or in different geographical contexts.

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