Corporate governance and management practices: stakeholder involvement, quality and sustainability tools adoption - Evidences in local public utilities

Local public services are the field in which New Public Management
(NPM) and Public Governance issues are most in evidence. The local public services
are characterized by the rethinking of the role played by local government in
the provision of services. An evolution has taken place. From a traditional configuration
in which local public services were managed by local governments they
moved to a configuration where a separation has taken place between the local
government role (which continues to be the guarantor of the satisfaction of public
needs) and the role of local public utilities (LPUs) (responsible for delivering the
services). This transformation implies both the delegation of resources and authority
to lower organisational levels within the public sector and the reconfiguration of
accountability chains between the state institutions and the society. In recent years,
an intense debate has developed regarding the introduction of new tools and control
systems. Particular attention has been paid to planning and control systems, human
resources management systems, and performance management systems, leaving a
few pioneers to develop their analysis on corporate governance mechanisms with
regard their relationships with both the external (stakeholders) actors and the
internal (management) ones. On one hand, the OECD wrote guidelines in order to
ensure good corporate governance practices, focusing on relations with stakeholders.
On the other hand, the dialogue between corporate governance and stakeholders
has been already tackled by a number of International organizations guidelines or principles, following a debate on corporate governance that has progressively
combined a stakeholder perspective with a more classic shareholder-maximizing
model of governance. This article contributes to the debate on the stakeholder
involvement process. By means of both a theoretical discussion and an empirical
research conducted on 37 Italian LPUs, this paper attempts to analyse specific
management tools which can be used to improve the quality of corporate governance
in LPUs, by extending the stakeholder involvement. Some NPM’s tools, such
as quality standards and sustainability tools imply an effort to offer new forms of
organizational behaviour in the decision-making processes (i.e. the choice of the
performance indicators and the reporting tools) and to create a dialogue between the
enterprise and its stakeholders. In particular, in our study we focus on the adoption
of quality standards (ISO 9000 and Customer Satisfaction) and sustainability tools
(sustainability reports and ISO 14000 standard) as NPM’s tools to facilitate the
stakeholder involvement practices.