COMPLIANCE WITH DL89/17 RELATED TO MANDATORY NON-FINANCIAL REPORTING: EVIDENCE FROM COMPANIES LISTED ON THE PORTUGUESE STOCK EXCHANGE

Purpose: The Directive 2014/95 EU, 22 October 2014, on disclosure of non-financial information, marks the beginning of a new stage in reporting of companies in the European Union (EU). This directive was transposed to Portugal through the Decree-Law No. 89/2017, of 28th July. This legislation establishes that large public interest companies, with more than 500 employees, must present annually, and since the 2017 financial year, a non-financial statement, included in the management report or presented in a separate report. The aim of this paper to analyse the publication of non-financial information by Portuguese listed companies, seeking to assess the level of compliance with the DL 89/17. Methodology: Content analysis of the management reports, accounts and sustainability reports, relative to the 2017 period. To assess the level of compliance with the Portuguese diploma, we have developed a disclosure index, built on mandatory disclosure requirements provided for in DL No. 89/2017. Originality: This paper contributes to European research in the field of non-financial reporting by providing empirical evidence in our country, Portugal, where existing studies are still scarce. Findings: We have found the following types of non-financial reporting: the use of own/separate report (in 37.5% of the sample) or the inclusion of information in the report and accounts (in 62.5% of the sample), with the majority presenting the information in a specific chapter. Regarding the compliance with DL 89/2017, we have concluded that the level of regulatory compliance is quite high, since the average disclosure index is around 0.875. The least disclosed items were the fight against corruption and bribery attempts, bodies diversity policies and human rights. Practical implications: The results obtained may contribute to the accounting regulatory bodies, with regard to potential enforcement mechanisms, in case of noncompliance with the diploma. They can also serve as a learning process for unlisted companies, or other types of companies not covered by the diploma, who are interested in implementing non-financial reporting practices.