function, inseparably linked to the humanistic–environmental profiles and, therefore, to the distribution of risks
concerning the different expectations that collectively converge on production.
The evaluation of going concern implies the ability to
project the present into the future. The judgment on going
concern cannot be separated from the time factor. The
evaluation must necessarily consider the context in which
the production player operates. The strengths (and weaknesses) make sense with respect to this player, as they are
able to seize the opportunities and/or face the threats that
emerge from the economic context.
The analysis of the context in which the company operates and its future developments represents the starting point
for any judgment that focuses ongoing concern. We must
then carry out a careful examination of the company, to
evaluate its harmony with the developments of the future
context, according to different points of view. The identity,
the mission–vision–strategies–programs sequence must,
therefore, be analyzed; the current and future economic and
financial strength in the short, medium, and long term; the
relationships with the interlocutors appropriately segmented,
in particular with regard to the sustainability of the
production/distribution process of earnings, on which the
well-being of the communities is based and on which the
production players are called to participate in a socially
responsible manner.
In the drafting of the social report, the crucial problem is
that concerning the diffusion of private information, that is,
of those news concerning aspects of management considered
critical, as they could jeopardize the going concern. In fact,
the influence that the critical information has on the company’s reputation (which—as is well known—is the
cornerstone on which the going concern rests) is not negligible. In particular, care must be taken to ensure that information is disclosed in the financial statements or if not
considered for the purpose of calculating income for the
period. In other words, it is necessary to reason whether and
how information can be disseminated about the negativity of
the company, which however did not participate in the
(quantitative-monetary) formation of the total operating
income identified by law.
The topic is complex, as it is necessary to reach a synthesis between:
– conduct evaluations for the assignment of the surplus to
those entitled;
– provide quality information on going concern, intimately
connected to the issue of risk distribution among production players and, therefore, to the humanistic–environmental aspects that characterize the business
management.
In other words, it is necessary to balance the reasonable
expectation to remunerate the bearers of the production
factors remunerated in a residual way with the quality of the
prospective information concerning the economic functionality of the production players.
We would like to point out, in this regard, that it is better
to avoid considering corporate social responsibility as a
homogeneous and specific variable, as it is a way of
observing company policy. It is evident that the strategic
choices impact (positively or negatively) on the results of the
companies. Strategies that tend to modify company policy
are pursued in the hope of improving results, but unfortunately, they do not always have the desired result, whether
one observes it financially or considers it from a humanistic–
environmental point of view.
Consequently, the outcomes of the empirical investigations conducted to analyze the relationship between CSR
and certain aspects of the economic function of enterprises
are inconsistent only in appearance (in the sense that they
reach divergent conclusions about the effects of CSR on the
financial results of the company).
To explain the reasons for our opinion, it is useful to go
back to distinguishing between CSR and going concern and
between CSR and the risk to which specific expectations are
subject. Greater or less preference (which sometimes
depends on the cost of claiming) of specific resources. It is
evident that in the first case a forward-looking (i.e., virtuous)
governance increases the probability of the duration of the
enterprise. The same governance can be considered riskier
with reference to individual expectations (always a priori
and with respect to alternative choices). The value depreciation of the expectations involved is determined. In other
words, discretionary choices in the humanistic–environmental field are taken in the hope of an improvement in the
conditions of going concern, or they should not be
implemented.
This is a difficult judgment in that it concerns the allocation of shared resources and then it may happen that, in
retrospect, similar initiatives of social relevance, in some
cases, have the expected “synthesis” effects. In other cases,
they are not separate, but should always be put into place in
the hope of strengthening the conditions of going concern. If
it were possible to try a different expectation, then it would
be a distraction of resources from the pursuit of institutional
goals. The institutional aims are not exclusively financial,
but can also be psychological (of power, affective, or solidarity). These other purposes are not acceptable as they
would tend to benefit the direct recipients of the socially
relevant action to the detriment of all the others, who derive
from the expectation of going concern the fundamental
premise for the satisfaction of their financial and nonfinancial expectations (Fig. 1).
The Business Going Concern: Financial Return …
211
concerning the different expectations that collectively converge on production.
The evaluation of going concern implies the ability to
project the present into the future. The judgment on going
concern cannot be separated from the time factor. The
evaluation must necessarily consider the context in which
the production player operates. The strengths (and weaknesses) make sense with respect to this player, as they are
able to seize the opportunities and/or face the threats that
emerge from the economic context.
The analysis of the context in which the company operates and its future developments represents the starting point
for any judgment that focuses ongoing concern. We must
then carry out a careful examination of the company, to
evaluate its harmony with the developments of the future
context, according to different points of view. The identity,
the mission–vision–strategies–programs sequence must,
therefore, be analyzed; the current and future economic and
financial strength in the short, medium, and long term; the
relationships with the interlocutors appropriately segmented,
in particular with regard to the sustainability of the
production/distribution process of earnings, on which the
well-being of the communities is based and on which the
production players are called to participate in a socially
responsible manner.
In the drafting of the social report, the crucial problem is
that concerning the diffusion of private information, that is,
of those news concerning aspects of management considered
critical, as they could jeopardize the going concern. In fact,
the influence that the critical information has on the company’s reputation (which—as is well known—is the
cornerstone on which the going concern rests) is not negligible. In particular, care must be taken to ensure that information is disclosed in the financial statements or if not
considered for the purpose of calculating income for the
period. In other words, it is necessary to reason whether and
how information can be disseminated about the negativity of
the company, which however did not participate in the
(quantitative-monetary) formation of the total operating
income identified by law.
The topic is complex, as it is necessary to reach a synthesis between:
– conduct evaluations for the assignment of the surplus to
those entitled;
– provide quality information on going concern, intimately
connected to the issue of risk distribution among production players and, therefore, to the humanistic–environmental aspects that characterize the business
management.
In other words, it is necessary to balance the reasonable
expectation to remunerate the bearers of the production
factors remunerated in a residual way with the quality of the
prospective information concerning the economic functionality of the production players.
We would like to point out, in this regard, that it is better
to avoid considering corporate social responsibility as a
homogeneous and specific variable, as it is a way of
observing company policy. It is evident that the strategic
choices impact (positively or negatively) on the results of the
companies. Strategies that tend to modify company policy
are pursued in the hope of improving results, but unfortunately, they do not always have the desired result, whether
one observes it financially or considers it from a humanistic–
environmental point of view.
Consequently, the outcomes of the empirical investigations conducted to analyze the relationship between CSR
and certain aspects of the economic function of enterprises
are inconsistent only in appearance (in the sense that they
reach divergent conclusions about the effects of CSR on the
financial results of the company).
To explain the reasons for our opinion, it is useful to go
back to distinguishing between CSR and going concern and
between CSR and the risk to which specific expectations are
subject. Greater or less preference (which sometimes
depends on the cost of claiming) of specific resources. It is
evident that in the first case a forward-looking (i.e., virtuous)
governance increases the probability of the duration of the
enterprise. The same governance can be considered riskier
with reference to individual expectations (always a priori
and with respect to alternative choices). The value depreciation of the expectations involved is determined. In other
words, discretionary choices in the humanistic–environmental field are taken in the hope of an improvement in the
conditions of going concern, or they should not be
implemented.
This is a difficult judgment in that it concerns the allocation of shared resources and then it may happen that, in
retrospect, similar initiatives of social relevance, in some
cases, have the expected “synthesis” effects. In other cases,
they are not separate, but should always be put into place in
the hope of strengthening the conditions of going concern. If
it were possible to try a different expectation, then it would
be a distraction of resources from the pursuit of institutional
goals. The institutional aims are not exclusively financial,
but can also be psychological (of power, affective, or solidarity). These other purposes are not acceptable as they
would tend to benefit the direct recipients of the socially
relevant action to the detriment of all the others, who derive
from the expectation of going concern the fundamental
premise for the satisfaction of their financial and nonfinancial expectations (Fig. 1).
The Business Going Concern: Financial Return …
211