Defining the Impact of Non-financial Reporting on the Process, Instrumental and Institutional Dimensions of Corporate Governance

Abstract

With the adoption of the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD), selected companies have to include and publish non-financial information in the course of their annual business reports (such as environmental and social matters etc.). This paper aims to determine the methodology and develop a research model to evaluate the impact of non-financial reporting requirements on the selected companies' process, as well as instrumental and institutional dimensions of corporate governance. Research methodology and research model will be defined in application with the MER model of integral management and governance (MER model). In connection with the MER model, this paper aims to contribute to the theoretical body of literature by developing a new research model using NFRD, CSRD, and EFRAG requirements to measure how nonfinancial reporting impacts process, instrumental and institutional dimensions of corporate governance. This paper also sought to illustrate the value and expected results of the future study when the research model is used in an empirical survey. A company must meet non-financial reporting requirements through all three dimensions of governance (process, instrumental, and institutional) to contribute to the company's long-term success, the well-being of society, and the achievement of sustainable development goals.