Corporate Social Responsibility and Corporate Governance in Italian SMEs: The experience of some “spirited businesses”

Mara Del Baldo1

Abstract: The study proposes to individuate the relationship between social engagement, social statements and governance of SMEs. Does an adhesion to the philosophy and to the practices of CSR, which are reflected in a firm’s mission and accountability, positively influences its governance? If so, is this influence more or less significant for SMEs with respect to large-sized firms? This paper winds itself around these questions and describes the principle findings that have emerged from a qualitative investigation focused on a selected group of “cohesive” Italian SMEs, in which their management complies with both economic and social issues. The empirical study finds that the diffusion of CSR is tied above all to the entrepreneur’s values and orientation and to the company embeddedness to the local socio-economic environment. The concluding reflections trace the features of a territorial model of socially responsible orientation cantered on the best practices of SMEs who are excellent examples of “spirited businesses” and are part of a network (which includes institutions, trade associations, non-profit organisations, etc.) that contributes to the diffusion of an orientation towards CSR and to sustainability across the territory.

Keywords: Business ethics, Corporate governance, Corporate social responsibility, Small and medium enterprises, Territory.

1 Introduction

If it is true that the consideration of ethical principles in a business’ choices and policies is particularly important for large businesses that are organised and run as public companies, then it is likewise true that in small and medium-sized businesses (SMEs), the dedication to, and

1 M. Del BaldoManagement Studies Institute, University of Urbino “Carlo Bo”, Italye-mail: mara.delbaldo@uniurb.it

articulation of, socially responsible management philosophies must reverberate directly across a plurality of “intangible” components.

Among these intangibles are the company’s strategic profile (in terms of integrating practices in a system of initiatives and integrated behaviours with the overall business strategy), the culture of the enterprise, the processes of accountability (improving systems of collecting and diffusing information, of disclosure and of informational transparency, as well as introducing procedures and forms of control), and systems of corporate governance (systems of decision-making processes and of internal control, configuration of assets and related matters). It is this totality of factors that reflect that specific nature of the SME: the convergence around the mission and value-set, facilitated by the proximity and by the direct involvement of the owner and/or the entrepreneurial family in managing the business; the simplicity of its organisational structure, which allows direct and frequent rapports between the corporate actors; and its rooting in the surrounding territory and socio-economic context. This last factor assumes particular importance in driving the business towards forms of CSR (Corporate Social Responsibility) that share a common thread – namely, they all possess values that typically express a particular socio-cultural and economic tradition of the territory in which they are embedded (Ringov and Zollo, 2007).

Where an adhesion to multiple declensions of CSR is present, corporate governance positions itself at the centre of relations between stakeholders, strategic profile and internal processes, human capital (Gazzola and Mella, 2006) and is experienced as enlarged governance (Sacconi, 2008). A necessary condition is the involvement of top management: the top managers and/or the entrepreneur serve as the impetus for the reorientation of the firm’s mission, from its maximization of profits to gaining value that comes from economic performance and finds a source in the modification of the business direction and the rules that govern it.

In this context, is it possible to affirm that socially oriented businesses are characterized by the “best” systems of governance? And on which specificities of SMEs is the evolution of socially-oriented management philosophy based?

To answer these questions, the present study utilizes a dual analytical perspective: deductive and inductive. The former is based on a review of the contributions present in the literature concerning business ethics, entrepreneurship and CSR among SMEs. The latter is developed through a qualitative study focused on several case studies conducted through a semi-structured questionnaire on a sample of SMEs in the Marches Region. The empirical analysis forms a part of a

more robust research project based on the qualitative and quantitative study of a sample of Italian SMEs, started in May 2008.

The explication of the research question can be articulated this way: to individuate the particular traits of the mission, systems of governance and of accountability that characterize the SMEs that carry a business culture in which social responsibility is lived within the governance of the firm. The central hypothesis is that in the presence of a solid ethical framework, which is promoted and shared by the entrepreneurs and managers who guide the business in carrying out socially responsible practices and towards adopting methods communicating them (such as a charter of values, a code of ethics, social report, etc.), the arrangement and quality of governance can mitigate tensions and dedicate more energy towards the good of the business, of its workers, and of the society and environment in which it operates.

The empirical analysis of such cases, conducted with reference to the interpretative framework of Lamont (2002) and Molteni and Lucchini (2004), also permits one to verify a second hypothesis: SMEs’ orientation towards CSR and the coherence between mission-governance-accountability which follows are facilitated by environmental factors - that is, of an anthropological and socio-cultural nature - present in the territory from which the entrepreneurs and the SMEs come. This makes it possible to trace the features of a Marchegian model of socially responsible orientation cantered on the best practices of SMEs who are excellent examples of “spirited businesses”.

The work is articulated in three principle parts. The first section traces the theoretical framework and synthesizes the existent contributions in the literature and of the researches conducted on the theme of CSR and business ethics, attempting a comparative reading with respect to large firms. The second part describes and interprets the principle findings that have emerged from the qualitative investigation focused on a selected group of “cohesive” SMEs, in which the nexus between mission, corporate governance and socially responsible management practices were examined. The last section closes the paper with concluding reflections.

2 Corporate social responsibility, ethics and corporate governance: an analysis of the conceptual framework

The recognition of an ethical and social dimension of business activity is founded on a vast corpus of theory. The earliest contributions

(Bowen, 1953) have been progressively enriched in the last twenty years, producing a vast and complex frame of normative references that has fed lively and rich2 debates involving academics form diverse disciplines: business-economics, management, sociology, anthropology, philosophy.

Four groups of theories form the core of this literature; they likewise correspond to four different approaches (Garriga and Melé, 2004). The first (instrumental theories) has Friedman (1962) as its most notable exponent, and is founded on the principle of the instrumentality of the business with respect to the creation of wealth, a goal that is synthesized as the firm’s only responsibility (maximization of shareholder value; reaching the competitive advantage).

The second (political theories), which can be divided into three principle theoretical strands (corporate constitutionalism; integrative social contract, corporate citizenship), is focused on the role of business and of the rights/needs which connect them, and on the responsible use of power in political and social arenas (Davis, 1960, 1973; Donaldson and Dunfee, 1994, 1999).

The third body of studies (integrative theories), in which the approaches of issues management, public responsibility, stakeholder management and corporate social performance coexist, maintains that “social demands are generally considered to be the way in which society interacts with business and gives it a certain legitimacy and prestige. As a consequence, corporate management should take into account social demands, and integrate them in such a way that the business operates in accordance with social values” (Garriga and Melé, 2004, p. 57).

The last represents a collection of ethical theories which, focused “on the right thing to achieve a good society” (ibidem, p. 64), includes the approach of stakeholder normative theory (Freeman and Reed, 1983; Freeman, 1984; Evan and Freeman, 1993; Donaldson and Preston, 1995; Phillips et al., 2003) which is based on the premise of universal rights (UN Global Compact, 1999), of sustainable development (World Commission on Environment and Development, Brundtland Report, 1987). It also includes the approach of the common good of society, in which space is made for theories

2 “Corporate social responsibility means something, but not always the same thing, to everybody” (Votaw, 1972, p. 25). Moreover corporate social responsibility has been described as “…an eclectic field with loose boundaries, multiple memberships, and differing training/perspectives; broadly rather than focused, multidisciplinary; wide breadth; brings in a wider range of literature; and interdisciplinary” (Carroll, 1994, p. 14).

concerning the “common good” (Maritain, 1966; Melé, 2002; Alford and Naughton, 2002; Alford, 2006; Sacconi, 2004; Catturi, 2006) and the Civil Economy (Zamagni, 1995, 2006; Bruni and Zamagni, 2004).

The nexus between corporate governance and the management’s and/or the entrepreneur/business owner’s responsibility is a theme which, in recent decades, has moved to the forefront and has fully merged into the ethics of responsibility theory: the duty of management is to actualize a balance of interests among all stakeholders, and social responsibility can (and must) be redirected towards the emersion of moral preferences and their connection with particular types of businesses (civil and social businesses) or, in lucrative firms, towards particular mechanisms of governance in which a relational perspective prevails (Zamagni, 2003).

According to such notions, CSR is an instrument of governance that facilitates the compliance of a possible “encounter” among actors inside/outside the firm, and governance become simplified when trust in the management and/or the entrepreneur increases and even more so when the same trust is repaid by the right results, equitable and gratifiable for all (Jones and Thomas, 1995).

Such a perspective signals the passage from a governance cantered on managerial and entrepreneurial aims to a multi-polar or holistic model (Sciarelli, 2007) which considers all who “matter” to the company and provided the foundation to a responsibility composed of economic, social and environmental demands, which provoke new problems.

The problems of business government3 touch on both the firm’s structural profile as well as its processual profile. In the latter decades the two-part question “who effectively governs” and “for whom” was enriched with the addition of a third question: “which interests should be favoured” rendering insufficient, from a normative point of view, the responses that come from the agency theory (Williamson, 1975; Jensen and Meckling, 1976). This theory recognizes the subsistence of a fiduciary mandate conferred by shareholders to the managers for the operation of the firm. The manager’s duty to act in the interests of the 3 Specifically, the aspects that lead corporate governance are: proprietary asset and the composition of the firm’s organs of government, relations and interactions among these organs (ownership, board of directors and management), the distribution of power and responsibility to the highest levels of the organization, the modalities of selecting and remuneration of the upper and middle management, transparency of the acts of government and internal control, the economic and financial information system, the modes and the instruments with which the decision-making processes and behaviours conform to the principles that inspire the functioning of the business. See Molteni, 2004.

ownership derives from this, as does his exclusive responsibility towards proprietary investors. Because the aim of investment is to maximize its economic return, the manager is therefore mandated to assume all of the decisions that can drive the firm towards this outcome4. Agency theory simplifies the description of the business’ government because it presupposes the existence of only one type of fiduciary relationship, characterized by divergent interests between principal and agent, which can be brought together through structures of control and through economic incentive plans. The two principle critiques of this theory regard the concentration of management’s attention on the rights of shareholders and on the recognition at the highest level of an exclusively economic motivation. Such conceptual limitations were in part overcome by the stakeholder theory5 which adheres more closely to the role of companies in the socio-economic context. The critical junction of governance no longer becomes the only one to ensure that the interests of the agent and principal coincide, but rather that the management can take place with respect to the interests of the more diversified stakeholders, as well as with those subjects connected to the enterprise itself.6 This requires compatibility between the maximization of economic returns of investments for shareholders and the satisfaction of aspirations – economic and non – of all the participants in the life of the company.

4 For a literature review on agency theory, see Mitnick, 1995, beginning on page 76.5 The cardinal rule of stakeholder theory is that “he who governs the firm must consider the rights, the interests and the expectations of all those who may be influenced by managerial decisions and who, conversely, may exercise their influence on the results of such decisions” (Freeman, 1984, p. 46).6 Regarding this citation, Jensen (2002), whose contribution is associated with instrumental theories, reaffirms the validity of agency theory; his conclusions are based on over twenty years of observations and reflections on the phenomenon of corporate governance. At the same time, he critiques the inoperative nature of stakeholder theory which, in his opinion, does not offer any criteria in deciding which objectives the manager must persue. The multiplicity of objectives from which he can choose (in caring for all of the stakeholders), in fact, does not provide any guide as to how to arrive at this result. In his opinion, therefore, enlightened stakeholder theory seems more realistic, for it is a theory that seems to better take into account the importance of the stakeholders for the survival of the firm seems more realistic, and is able to reconcile shareholders’ interests with those of the interlocutors in the long-term. This theory is likewise critiqued and considered ethically inadequate with its sense of treating people as means of making wealth rather than as ends in and of themselves (Alford, 2006, p. 3).

The problems of “ethical cores” and of the ethical foundations of stakeholder theory have been addressed by diverse authors. Stakeholder theory has become one of he most important developments in the field of business ethics. This concept has evolved and gained prominence as a method of integrating ethics into the basic purposes and strategic objectives of the firm. “Work on corporate social responsiveness and corporate social responsibility helped to expand the horizons of our moral imagination and articulate the relationship between corporations and ethics” (Wicks, Gilbert and Freeman, 1994).

Stakeholder theory is considered both an ethical theory of organisation as well as a theory of strategic management (Phillips et al., 2003). In the context of stakeholder management7, the distinction between normative stakeholders (towards whom the organization has a moral obligation to treat equitably) and derivative stakeholders, towards whom there is no obligation to treat equitably, is done based on the fundamental principle of equity, according to whom in a cooperative environment, each participant should receive benefits equal to the sacrifices they make (Phillips, 2003).

One can consider a company as a sort of “independent stakeholder-subject system”; all stakeholders tend to pursue a dynamic equilibrium between themselves based on “minimum mutual acknowledgement” (MMA); each stakeholder “draws up” his own specific “map of the stakeholders” and, while respecting the MMA, tries in any case to negotiate in order to achieve a situation of strategic equilibrium which is most favourable to their interests. These principles of general stakeholder theory (Rusconi, 2006) consider the business as one element within a broader network and confirm the importance of relationships and trust between diverse interlocutors (Rusconi, 2006).

In this sense, stakeholder theory, which introduced the concept of equity (fairness) and of the just treatment of diverse interlocutors, “also becomes an ethical theory, in which values and principles of moral nature are recalled” (Sciarelli, 2007, p. 13). The concept of fairness recalls principles and values of a moral nature, which are necessary to supplement or integrate scarcity in a form of governance that is not effectively disciplined towards a juridical orientation and towards prominent market forces, so as to balance the conflicting interests of diverse participants. These last factors have and “have to

7 Stakeholder management is built around individuation, in both the classification and in the management of relationships with diverse interlocutors; that is, in the application of stakeholder theory to the business’ government.

do” with altruism, moral gratification, the “logic of happiness” (Baldarelli, 2005), satisfaction, gratuity and gifts (Gui and Sugden, 2005; Bruni, 2005) and the honour of such behaviours (Brennan, 1994).

Ethics among strong and weak interests, inasmuch the doctrine and practice is oriented towards the decision between right and wrong, represents an effective and necessary response to real demands of present and future corporate governance.

This approach opens the way towards an application of ethical values in corporate choices. This is translated into the model of CSR-social-responsiveness-issues management8 in which the principles of solidarity and trustworthiness are reconciled and enmesh themselves in diverse levels of commitment correlated with the typologies of relations with stakeholders.

Nevertheless, such a framework rests on the disassociation between ownership and government of the company, which is typical in the United States but rare in other contexts – especially in Italy.

Therefore, other important contributions that help to explain the relationship between CSR and governance and offer an interpretative key regarding SMEs come form the stewardship theory. “Founded on psychological and sociological traditions, stewardship theory represents an alternative model of motivations and managerial behaviours” (Davis, Schoorman and Donaldson, 1997, p. 43), based on a concept of Man that is diverse from the theory of rational choice. Here, Man is moved by a complex of motivations that are at once economic (extrinsic and tangible), social, and emotive (intrinsic and more difficult to quantify). In their monograph, the authors comparatively analyze agency theory and stewardship theory to demonstrate the necessity of clarifying the two approaches’ behavioural and situational premises. If Man is motivated only by economic stimuli, is scarcely linked to the organization and uses institutional power, he typically enjoys relationships in the field of agency theory, and must be disciplined through incentives and assessments. If he is pushed by more robust social motivations, he has a strong organizational commitment and is given a personal power linked to authority, his is more in line with the relationships outlined in stewardship theory. The link, the degree of commitment and of identification with the firm and the way of exercising power in the organisation (in agency theory power is institutional and derives from

8 Issues management as an instrument for improving the capacity of the firm by discovering the emergent social problems and responding to them with specific programs of activity (Carrol, 1993).

a covert role; in stewardship theory power is personal because it is founded on the authority assumed by the steward) constitutes the two subjective factors that distinguish the manager from the steward. Under the objective aspect, the difference is one between a directional philosophy founded on control and one founded on involvement, such as between an individualistic culture and a cooperative (collectivist) culture, and a greater level of democracy (distribution of power inside the agency). Thus, the authors’ principle contribution is that of developing the theme of motivation and of having substituted deterministic conclusions (absolute validity of one theory or the other) with situations that vary according to the choices made by the owners and the ownership. Such a situational and contingent approach can be adapted to SMEs in which the contingent variable linked to the entrepreneur influences the nature of the relationship of government inside and outside the firm, and on the governance of the firm itself.

This theory is based on an orientation of cooperative and non-conflictual government, founded on trust and oriented towards the long-term. Attention shifts, in fact, to motivational and relational aspects which is well adapted to the vision at the core of a firm’s mission and of the system of government typical for small businesses that are socially oriented. In this context, the vision of the problems of corporate governance is strongly linked to human nature or, rather, to how he who governs reads the values of the human beings who are committed to the business. “To evaluate the conditions on which the firm can cultivate an ethical and collective conscience, one must start from the motivations that inspire entrepreneurial or managerial behavior” (Sciarelli, 2007, p. 110). It therefore becomes essential to pay attention to the goals of the entrepreneurial subject and the distinctions between the diverse characterizations of the motivations of those who govern large companies and SMEs.

3 Ethics, governance and accountability in large companies and in small and medium-sized businesses

Although the ethics corporate culture is not born in the environment of small firms, which have been given less attention in ethics literature (Spence, 1999; Tilley, 2000; Spence and Schmidpeter, 2003), it finds its own matrix in the very specificity of the motives and the values that guide the policies and the actions of the small-scale entrepreneur. There are three essential motives: the influence of the subjective sphere, which in the small firm is maximized, the importance of relating to the internal and the external, proclaimed by

its limited dimension, and the social rooting of the small business and of its creator (Del Baldo, 2006a). With respect to the manager, the entrepreneur is rarely motivated by purely economic factors. More often, he experiences more ample stimuli under the social profile, is characterized by a strong identification with the organisation (organisational commitment) and is given personal power linked to authority, as is typical in stewardship relationships. Subjective variables lie at the core of entrepreneurship, which serve to explain behaviours, returns to personal characteristics and motivations of a psychological and sociological nature (Marchini, 2000).

In the sphere of typology matrix studies on entrepreneurship numerous classifications of entrepreneurs have been drawn, based on the types of objectives and personal characteristics they possess and strategic models (Julien, Grepme, 1994) have been proposed which place the objectives of the entrepreneur among the key variables that influence strategy next to organisational factors, the environment (intended as global society and as sectors of activity) and production activities. Values9 and attitudes towards the social context are central factors in the strategic system; they are expressed by the vision and the “entrepreneurial formula” (Coda, 1985).

“Values nourish the organisation and enhance the spirit of entrepreneurialism” (Lamont, 2002). They are like roots, which inspire the strategic orientation of responsibility and constitute the most important source of identification inside the firm and the primary basis of external legitimization (Cerana, 2004). Competitive positioning of the company springs not only from adapting to the binomial trade/mission but also “from the business’ capacity to open itself up to ethical values dominant in society, to the resulting roles and responsibilities and thus to the necessity of a legitimacy in which factors of valorisation of its image” (Marchini, 1995, p. 114). Entrepreneurial motivations and aims are placed at the base of the theory of social success of the entrepreneur (Sciarelli, 2007)10. Success is measured by not only the results achieved by the enterprise, but

9 “Values are abstract ideals of those that are considered “good”, desirable, preferable; they don’t have a specific object or situation and construct models that guide and determine action, scope, attitudes, ideology or representation of itself in terms of others. Even the attitudes are beliefs possessed by people, but are less stable and always refer to a specific object or situation. Values and attitudes influence individual and collective behaviour in many ways in the field of strategic management; those possessed by the entrepreneur or by the management are considered among the principle factors that determine the strategic decisions of the enterprises.” (Marchini, 2000, p. 92).

more so by the achievement of respect gained from the surrounding community. Social leadership represents an endpoint of entrepreneurial activity and social power finds its counterbalance in social responsibility attributed to, and embraced by, the entrepreneur. His understanding that the solidity of the firm’s success and the consequent relapse in terms of social power is also founded on respect for both economic balances and on moral values (Quinn, 1997).

Large corporations usually separate ownership and control, and dissociate between the figure of the business owner and the entrepreneur, replaced by a delegated manager11. The different interests of the owner and the management elicit problems of practice and of control of the same proxy, inside of which the system of shared values becomes central and the opportunity to balance/reconcile the interests and powers of the diverse protagonists in the life of the firm. The search for the values that provide the foundation to the proxy manager and to how his decisions are put into practice has recently tended to view ethics as the key factor. The majority of top men in large firms consider it a factor of success and demonstrate that they are sensible towards social responsibility and business integrity (Longenecker, 1989; Longenecker et al., 2006), which is no longer an option but an indispensable element for the creation and maintenance of positive relationships. Even if the CSR has yet to factor into the value structure of the entire management, it nevertheless increases its orientation towards an “exchange of abilities.” This model, imported from the Anglo-Saxon world, increases the space of dialogue on the terrain of governance and of competences and capabilities between the enterprise in the for-profit sector and non-profit organizations. Fronts of collaboration on projects and communal interventions are increased, there is a greater generation of multi-tasking managers – who are carriers of

10 “It is legitimate to hypothesize that the entrepreneur transfers a large part of himself into the firm, and that his fundamental objective is to produce a strong firm, one that is able to develop and to ensure the respect and admiration in competitive circles around which it operates, as well as in the larger socio-economic context in which the business plays a part” (Sciarelli, 2007, p. 117).11 “It is possible to refer to different sides under the profile of the rapport between ownership and government of the enterprise, separating the context of the “public company,” prevalently North American, from that of the “family business” that is very diffuse in Europe. One can easily imagine that in these two cases, different levels of difficulty are assumed with respect to social responsibility and the introduction of ethical principles in corporate management” (Sciarelli, 2007, p. VIII).

supportive values – as well as the number of top-level executives that move to the third sector.

In large companies, due to the diverse grade of identification between the enterprise and the manager, and the non-persistence of the rapport with the enterprise, success fulfils an intermediate or instrumental aim. The proxy finds it difficult to define the subjects he is to promote, in fact, the entrepreneurial aims. Trust is cemented in the achievement of durable economic results for the shareholders, often negating the “luxury” of ethical principles and objectives in the company’s management. Short-termism (Hosmer, 2001) is privileged over the construction of long-term values, and is connected with the firm’s image and with the improvement of relationships among all of the stakeholders.

Regarding ethical principles, the manager may not have much discretion or may encounter limits. Even SMEs experience “pathological” situations (subordination of personal interests and / or family to that of the company, limited moral and ethical depth of the firm’s manager). Nevertheless, for the entrepreneur, the pervasiveness of ethical values in the company’s decisions is maximized. “In SMEs the owner-manager is both the driver and implementer of values. Managers exhibit their personal values through the exercise of managerial discretion and SMEs’ owner-managers has the autonomy to exercise such discretion.” (Hemingway and Maclagan, 2004). For the owner-manager, the link between the company’s success and his own is personal and more closely visible with respect to that which is realized in the contexts of proxy entrepreneurship and of public ownership. This aspect, together with other factors typical of SMEs (independence, polyvalence, and prevalence of personal and informal relationships) render the path from the ethics in the firm to the ethics of the firm more arduous for large-sized companies. This also stems from the fact that examples of top managers capable of arousing emulative behaviours and of transmitting to the whole organisational body values coherent with social and ethical profiles are less visible. And while there is a lack of will at the top of the enterprise, typical instead of small-sized firms is to measure the long-term benefits (Zamagni, 2007).

In small businesses, the transmission of values is simplified by the flexibility and thinness of the organisational structure. The ethical principles are diffused through decisions of people who are influenced by strong moral values (trust, loyalty, equity), and who often have an innate attitude to perceive the ethical dilemmas inherent in such decisions and to evaluate the sustainability of their ethical choices for maintaining the firm’s equilibrium - attitudes

further reinforced by the adhesion to the practices and the instruments formalized by the CSR (codes of conduct, ethical codes, social/environmental/sustainability reports, etc.).

Ethicalness towards the stakeholders on the part of the top management/entrepreneur also implies accountability and transparency as an essential prerequisite for the correct working of the economic systems (Rusconi, 2006)12. The Author placed direct accountability documents13 within the context of stakeholder theory highlighting the business. Accountability documents serve to orient the plurality of stakeholders towards betterment in their decisions:- illustrating the vision that the firm has about itself, about the world in which it operates and exists (for example, across codes of conduct and regulation);- explaining the characteristics of its own governance and on its measurements, so as to reduce or mitigate conflicts of interest between shareholders and managers who are co-present in the strategic management (for example, providing information on the remuneration of top management, on the presence of effective independent administrators, on the organs and instruments of internal audit, and on the movements of stocks owned by administrators);- providing information about the processes of coordination with the stakeholders and their economic successes (production and distribution of added value statement), on private social costs, on the social costs assumed, on the internalized social proceeds and on the externalized private ones), as well as trying to explain this information in economic terms to make the costs that the firm is supporting understood, so as to effect the assumption of a specific line of social responsibility. - evaluating and monitoring intangible resources (relational, human and organisational capital).

In this context, accountability – if it is conceptualized as an informative system that facilitate dialogue and coordination among the management/entrepreneur and the principle internal/external

12 In the context of historical studies about social accounting in Italy one can cite Terzani, 1984; Matacena, 1984. For an ample review of the different contributions, see Baldarelli, 2005, pp. 19- 59. 13 Direct accountability is found in documents which are published specifically and exclusively to “give an account for” at the end of the year on the fulfilling of its own responsibilities, typically that which takes place in the financial statement and the social accounting. Indirect accountability in documents which, like ethical codes, inform the stakeholders of what the company plans to do (above all in terms of behavioural rules), has to respect its duties in check on the conformity with the codes resulting indirectly from the social accounting. See Rusconi, 2006.

interlocutors – produce reports that are applied as relational and strategic instruments (among the organisation and interlocutors, which enable forms of listening and feedback) and as vehicles for reciprocity. They are able to be utilized to “give accounts and request accounts” of the mission, to converse and to “plan” with all those who contribute resources in their varied forms, to produce information on economic externalities and not those generated and assumed by the firm. Their strength and their ability to become real tools to govern relationships depend, however, on the spirit with which they are realized, how they are morally sustained, and how they are codified. While the social orientation of the firm and its reflection on accountability (Gray, Adams and Owen, 1996) is simplified in small and medium-sized firms, in large businesses these instruments, together with the institution of specific figures (ethics committees, sustainability controllers, ethics officers, CSR officers) often represent the only means of creating consent around the correct delegation of powers, to develop an ethical means of training employees, to create a space of dialogue and of comparison and to establish emulative processes, overcoming bureaucratic obstacles and the logic of the budget.

4 CSR, governance and SMEs: the empirical framework

The increased attention towards CSR and SMEs is attributed to a more generalized interest in sustainability that promulgates socially responsible management at the global level. On the one hand, this interest was heightened at the European level after the Council of Lisbon in 2000, which specifically addressed SMEs. Comparative analyses confirm the superior diffusion of CSR compared to large firms. At the same time one can underscore the fact that SMEs’ predominantly informal approach (“sunken or silent CSR”) does not have to lead to considering CSR a prerogative of the former (Russo and Tencati, 2006; Perrini, Pogutz and Tencati, 2006); the proactive orientation of SMEs is thus relevant (Luetkenhorst, 2004), even if it is not explicit (Matten and Moon, 2004; Spence and Rutherford, 2003; Longo, Mura and Bonoli, 2005; Mandl, 2006) and attests to a sustained socio-competitive creativity.

On both the national and international levels, there emerges the need to deepen the understanding of the motivations of the small firms’ commitment to CSR (Morsing, 2006) and to provide guidelines and instruments to aid SMEs adopt and communicate socially oriented policies (Castka et al., 2004). At the same time, the need to adopt a

diverse perspective with respect to conventional theories is confirmed and the necessity to bring to light specifics of SMEs (Jenkins, 2004). Among these one finds a central ethical orientation and the entrepreneur’s values.

One relevant aspect that emerges from the researches conducted on the diffusion of CSR in SMEs (MORI, 2000; Joseph, 2000; European Commission, 2001, 2002a, 2002b; European Union, 2004; Molteni et al., 2006) is, on the one hand, that the process of orientation towards CSR normally is promoted by the top members of corporate government and, in particular, by the owner-entrepreneur and depends on his ethical orientation and values (Vyakarnam et al., 1997; Jenkins, 2006a). On the other hand is the importance of peculiar approaches to CSR, cantered on a logic of SMEs’ involvement in networks or based on membership in specific districts (Molteni, Antoldi and Todisco, 2006; Battaglia, et al., 2006; Ørskov, 2006; Kromminga and Dresewski, 2006; Baldarelli, 2007). The participation of the SME in networks characterized by the presence of a plurality of interests, both public (local organisations, chambers of commerce, universities and research centres) and private (trade associations, non-profit organisations, credit institutions, professional orders), facilitate the implementation of actions and programs of socially oriented development of SMEs and of the local environment in which they are inserted (Fugazza et al., 2006; Lepoutre, 2006).

Some particular aspects emerge from the research conducted in this regard. The first concerns the importance of an entrepreneur’s sense of belonging and membership in the community, which behaves like a launch pad for the experimentation of policies imprinted by CSR; the second concerns the importance of support by institutions, local authorities and trade associations to create a platform for the sustainable development of the local community. A third one concerns the contribution of CSR in terms of increasing the social capital of the SMEs (Spence, Schmidpeter and Habisch, 2003), of participating in the construction of the common good (Spence and Schmidpeter, 2003), of contributing to the sustainability of specific territories (Del Baldo, 2006b; 2008).

Another element of interest is the influence of the practices of CSR on the strategic profile, which is manifested overall in terms of the development of a culture of responsibility. Direct involvement in such problematics helps to elaborate or to rethink the mission, to formulate new strategies towards certain categories of stakeholders, to stimulate the introduction or the revision of the ethical code, to increase the attention paid by the board of directors towards the themes of CSR, to

promote modifications to the internal audit system or to introduce new organs of control.

A third trait is the capacity of the instruments of CSR to act as a driver for sharpening certain aspects of the system of corporate governance, for responding to the demand for accountability, and for developing a strategic information system.

Regarding the performance indicators expressed through international and national standards (GBS, 2001; GRI, 2002; GRI, 2006; GRI, 2008) concerning the effects of CSR on corporate governance, positive signs emerge, especially in terms of the space given to the representation of minority shareholders and to independent directors, frequency of meetings of board of directors, renewal of organs of government, exceeding the level of compliance and protection of the petitions of stakeholders. These traits make the divide between the large and small businesses’ involvement in CSR less profound and significant. At the same time, it underscores the successful trend that the typical culture of patronage based on the centralization of responsibility and the traditional closed nature of family-owned SMEs is moving towards incorporating the participation of external subjects.

Although the path towards an emersion in best practices must be intensified, most small firms already “do the right thing” or, at least, “do many good things”, adopting mild instruments and instituting simple rules that establish the beliefs of the firm, predispose rapports on best practices or articulate a code of responsibility and principles of governance. And where the communication of CSR is more structured, as in the actual experiences of the firms analyzed below, they help to overcome the limits of financial and economic information of balance and the fragility of traditional accounting and informative systems, and open new paths of growth.

5 Some experiences of excellent stakeholders relationship and social engagement profiles in Italian SMEs

5.1 Research objectives

The study of the field first attempted to identify the central value present in the companies interviewed, its translation into a mission and, consequently, the impact on relationships with stakeholders, its reflections on the structure of government, and the presence of instruments of accountability. The hypotheses posited at the base of this study are the following:Hypothesis one:

CSR reinforces and facilitates the convergence between mission, governance, and accountability; the orientation towards CSR is therefore reflected positively on the governance of SMEs. Hypothesis two:Among SMEs, the orientation towards CSR begins with the entrepreneur and is a manifestation of both the values tied to personal goals as well as the values tied to cultural and social variables in the territory from which he comes.

First, this requires attention to be focused on the elements of the trinomial mission-corporate governance-accountability and on their reciprocal relations, departing from the assumption that “in every enterprise there exists an explicit and coherent coordination between mission, governance and accountability” (Matacena 2005; 2008). Mission is used here to mean an explication and a synthesis of the company aims; corporate governance as the command structure and of the government present in the company; accountability as the informative responsibility of the company. Matacena’s model is herein utilized to analyze the relations and the coordination between the aforementioned elements and is preferred over both the stakeholder approach and the stewardship view because the author extended its contextual applicability to diverse typologies of businesses, including small and medium-sized firms, which are the objects of this study. He distinguishes ideal types of businesses in one-to-one relationships between mission e corporate governance14. Such relationships define the level and content of accountability of every specific ideal type of business. Among the Italian experts who research social responsibility, the author, who defines the business as a socio-economic system, provides interpretive cues on how to maintain equilibrium between productive groups and human groups, which are particularly brought close together in small and medium-sized firms. The author equally maintains that economic responsibility weighs on all of the firms present in the market. What is diverse,

14 The author distinguishes, on the one hand, between lucrative businesses (in which the asumption of specific forms of social responsibility is tied to the maintaining conditions of legitimacy and of concensus in their actions), cooperative and mutualistic businesses (in which responsibility is connected to principles of solidarity), social businesses (in which the same ends are followed), and small and medium “territorial” businesses. For the first type, social responsibility is considered a specific quality for entrepreneurial activities. In the second and third, the mission is predominently concerned with social solidarity. The third type is characterized by territorial vocation, that is, by the fact that their relationship with their surrounding environment and the coordination with all actors in the marked is a condition of their own economic development.

however, is their social responsibility, because the businesses that make up the market are diverse in both their mission and their governance. Therefore, specific missions, with their relative corporate governance, indicate both the business’ level and type of accountability.

Second, this implies that one must identify those aspects of the system of governance in SMEs which draw on the positive actions that orient the models of behavior of the firms who are capable of realizing socio-competitive synthesis (Molteni, 2004). Socio-competitive synthesis is itself derived from a stable and structured approach to CSR, incorporated in its own strategic orientation, in its underlying mode of governance and its system of internal and external reporting. The typology elaborated by Molteni and Lucchini (2004) was utilized to place the behaviours of the firms in the sphere of a grid of codified readings. Lamont’s (2002) theoretical diagram was employed to individuate the most relevant aspects of a “spirited business”.

5.2 Methodology

The following study was developed according to a qualitative approach and a methodology based on field case studies. The fieldwork approach, as suggested in the literature (Adams, 2002) facilitates the involvement of the researchers of business economics in the actual activities of the companies to study the processes and the organisational practices of social accounting. This methodology consists of individuating the internal factors (organisational structures, internal micro-processes, attitudes, points of view, perceptions) that, together with the corporate characteristics (size, sector, age of the business, etc.) and the general contextual factors (economic, political, cultural, etc.), explain the complexity of the social statement and that, other than influencing the nature and the extent of the corporate social reporting and of the social engagement profile, impact the system of governance.

In general terms, the case method15 has the double aim of detailing the principle characteristics of the phenomena, and to both understand and analyze the dynamics of a given process. Under the methodological profile, the development of a case study represents a “strategy of research that is concentrated on the comprehension of the dynamics that characterize specific contexts” (Eisenhardt, 1989, p.

15 On an analysis of cases see Yin (1994, 2003); on specificities of research on small businesses see Silvestrelli (1986), Ferraris Franceschi (1993).

532). The qualitative approaches and the forms of research in action (Fayolle, 2004) allow for one to describe, explain and understand the entrepreneurial situations in their own dynamics and in their own evolution.

Specifically, the case method constitutes a precious instrument for “capturing” the diverse manifestations of socially responsible government as well as of stakeholders relationship and to utilize the results both with a cognitive aim as well as with normative merit; such “cases for CSR or normative cases” can indicate best practices and to suggest criteria for further action (Craig, 2003).

Indeed, it is the opinion of those who write that the utility of the cases also reside in the possibility of valorising the experiences of entrepreneurs who are “champions for corporate social responsibility” (Jenkins, 2006b; 2006a)16 and of recognizing the merit of people and businesses who teach them, while not undervaluing the possibility of a path towards CSR that starts “at the base” and is concreted in the territory, favouring the imitation of best practices and raising awareness of the operators that converge inside small businesses.

Specifically, the study was centred on the analysis of seven Marchegian SMEs17 (multiple/collective cases study approach) that belong to mature and emergent sectors, characterized by different social and environmental contexts, and represent the entrepreneurial and economic fabric of the region.

Two clarifications are necessary regarding the firms selected, with specific reference to their size and geographic area in which they are found.

First, the businesses considered are predominantly medium-sized (in both the number of workers and quantity of sales). Nevertheless, as one will see in the following section, the excellence of their behaviours can be found in even the smallest firm in this study (BoxMarche, 50 employees). Such businesses are not cited and are completely or predominantly family-owned (six out of seven); they are typical of the “family businesses” found throughout Italy. They do

16 “(…) This also led many to be external champions of CSR, promoting the agenda because the truly believed in it (…) It has a dedicated change-agent or “champion” in its owner-manager whose own values have influenced the direction and strategy of the company” (Jenkins, 2006a, p. 8; p. 13).17 In the definition of an SME, along with the attributes defined by the Recommendation of the Commission of the European Community on 6 May 2003; 2003/361/CE, the qualitative parameters were considered (independence of the economic subject, connection between ownership and control), following a setting diffusely adopted in the studies and in the research on small-sized businesses.

present, however, managerial assets and evolved organisational structures and perform competitively.

Secondly, the businesses come from a particular region in Italy, the Marches, which is characterized by a thick fabric of diffuse entrepreneurship, a typical example of the development of local systems and districts. They constitute a classic example of the “Third Italy” model in which the development of SMEs is established in small centres, without upsetting the pre-existent agricultural and artisan vocations, and preserving socio-economic fabric of relationships anchored in the territory. This region hosts numerous cases of entrepreneurial excellence tied to a specific “genius loci” and it is on this basis that it is possible to trace a model of “territorial CSR”.

Thus, because of these attributes of the specific group of companies and of their specific socio-economic context, the findings are valuable in this perspective.

The analysis was based on the collection of information acquired in May 2008 from diverse depth semi-structured interviews with the top entrepreneurs/managers, on direct observation during the visits to the selected enterprises, and on the analysis of available documentary sources (content analysis). The research was conducted at the micro-level, i.e., it was grounded in the perspective of owner-manager/managing directors, whose personal values influence the strategic direction a company takes (Burns, 2001), and shows how CSR is balanced with the daily activities of the company.

The phases across which the empirical study was implemented and the decisions formulated are represented in the table below (Table 1).

Tab. 1- The phases and the choices of the empirical study

Phases Object of the Choices Motivations of the ChoicesSpecifics of industrial sectors referenced

Wood-furniture-interior decoration; paper industry; engineering, machine tools-components, metallurgist industry; electrical and electronics equipments, automatic equipment and plants-design-robots (high technology); financial and banking services

Traditional and mature sectors, and emerging sectors, characterized by different social and environmental impacts, representative of the entrepreneurial fabric of the Marches Region (Italy).

Choice of the enterprises

Small and medium firms Cohesive/multi-certified firms

Selection of areas and organs on which attention was focused

Top level of the company (entrepreneur -founder/successor -, managing director, general manager)

Entrepreneurial/managerial team directly involved in corporate governance

Structuration of the research instruments

Administration of a semi-structured questionnaire (paper and pencil interview method), prepared interviews, note-taking, tabulation, transcription, validation and correction, telephone conversations and contact by e-mail

Qualitative/quantitative analysis and triangulation of methods

5.3 The results

5.3.1 SMEs Marchegian “champions” of CSR

As indicated above, the businesses were selected for their excellence relative to sensibility and to their dedication to CSR. Specifically, the selected enterprises are characterized by the following attributes: presence of a framework of ethically connoted values, and values shared by the leaders of the firm (entrepreneurial proprietor/family, managing director) and diffuse throughout the organisation; adoption of strategies of social responsibility with an adhesion to CSR codes; adoption of processes of social and environmental certification; regular publication of social and environmental reports; fulfilment of ample and significant initiatives of social

responsibility both on the local, national and international level; recognitions/awards received for their robust activities of social

responsibility. sensibility to the diffusion of best practices of CSR in the local and

extra-local context in which they are found.In short, these aspects refer to the following declination of CSR: presence of a philosophy of governance and of socially oriented

management, which is reflected in its mission and its governance; production of initiatives and strategies of CSR; communication of CSR and development of systems of

accountability.The principle attributes of the seven enterprises are synthesized in the table below (Table 2).Tab. 2 – Characteristics of the firms

Company title - Registered office - Year of constitution - Sector - Corporate purpose - Employees – Total Sales (2007) - Economic

subject

Instruments of implementing and communicating CSR, Year Introduced

BoxMarche Spa, Corinaldo (AN); 1969Paper industry: design and production of packaging in food and houseware sectors50 employees; 11.000.000 euro; open family-owned business18

ISO 9001, year 2001; OHSAS 18000-SA 8000, year 2003; Social report, year 2003; Global report19, year 2006

Banca di Credito Cooperativo di Gradara, List of company values (“charter of values”),

Gradara (PU); 1911Banking services94 employees; 16.200.000 euro; co-operative society

year 2002; Social report and mission statement, year 2002; Code of ethics, year 2004

Gruppo FAAM Spa, Monterubbiano (AP); 1974Engineering, metallurgist industry230 employees; 60.000.000 euro; diffuse shareholding (not cited)

Quality certification ISO 9000 and Vision 2000, year 1997; Code of ethics, year 1999; Environmental certification EMAS/ISO 14001, year 1999 (first in its sector in Europe); Social report, year 1999; Environmental report, year 2001

Gruppo Fbl Spa - Della Rovere Spa, Pesaro (PU); 1976Wood-furniture-interior decoration137 employees; 38.000.000 euro; open family-owned business

Certification ISO 14001, year 2001; Social report, year 2005

Gruppo Loccioni, Angeli di Rosora (AN); 1969Electrical and electronics equipments, automatic equipment and plants-design-robots (high technology)290 employees; 45.000.000 euro; open family-owned business

List of company values (“charter of values”), year 1969; Code of ethics, year 1996; Social report, year 1997; Intangibles impact, year 1997; Cause Related Marketing, year 1999

PRB Srl, Fermignano (PU); 1972Metallurgist industry (metal galvanizing)160 employees; 20.000.000 euro; closed family-owned business (first and second generation)

Environmental certification EMAS/ISO 14001, year 2001

TVS Spa, Fermignano (PU); 1968Metallurgist and mechanics industry276 employees; 57.000.000 euro; closed family-owned business (first and second generation)

Quality certification ISO 9000 and Vision 2000, year 1999; Social Accountability Standard- SA8000:2001, year 2004

5.3.2 The forms of social engagement

A first level of analysis was focused on the identification of common lines (Table 3) relative to the core values and to the behaviours of the entrepreneurs and top-level managers, to the reflections on their mission, to the presence of instruments of accountability and reporting of CSR, to structural characteristics and dynamics of governance.

Tab. 3 – Key attributes of social commitment & engagement

Key characteristics LinksStrong system of valuesPresence of a cohesive economic subject around

“Values nourish the organisation” (Lamont, 2002): diligence, labour, equity, trust, honesty, simplicity, integrity, parsimony, sense of

18 The open family-owned economic subject can be defined as the economic subject characterized by the presence of a social team that is not formed exclusively by members of the entrepreneurial family (closed family-owned economic subject), but also extends to external subjects not tied to kinship bonds. 19 The Global Report contains asset and liability statement, social and environmental report, and an analysis of intellectual capital.

base values. family, team spirit, enthusiasm, energy, responsibility, communicative nature.Leadership fully believes in and lives those values and purposes.

Orientation towards CSR strongly desired by the entrepreneur, visible and integrated in the enterprise, tendency to social success.

The top-level entrepreneurial/management commitment & engagement represented in “the first best practices”.

Purpose, vision and values are constantly reinforced through culture and processes and continuously communicated throughout the organization and beyond

Organisation aligns and articulates explicitly its purpose, vision and values consistent with responsible business practices.Effective stakeholder engagement processes.

Affiliation in geographical zones historically characterized by a solid rural tradition, typical expression of Marchegian culture.

Rooted and engaged in spreading well-being in the local community in which the firm is located.

Decision-making process based on collaboration, sharing and transparency. Relational approach cantered on trust value.

Organisational strength: participation. Climate is social and organisationally spread. Values, mission, objectives constantly reinforced across the culture and processes, articulated in a flexible and organic structure.

Instruments of accountability and communication of the socially oriented commitment.

Values and mission explicated and communicated that ensure consistency in decision-making and avoid value-gaps.

Cohesion to stakeholders as a source of mobilizing resources with far-reaching consequences.

Growth of intangible capital.

Affiliation in local, national, international networks of CSR.

Desire to testify to and understand best practices adhering to multiple occasions of exchange and comparison (workshops, forums, meetings, testimonies, etc.).

All of these businesses exemplify a strategic and structured approach to CSR and align business values, purpose and strategy with the social and economic needs of stakeholders, while embedding responsible and ethical business policies and practices throughout the company. CSR is experienced as a “way of doing business”; is about operating and managing the business in a way that is sensitive to the

external and internal environment. Everyone in the company is aware of the company’s commitment to CSR. The companies have an internal change-agent, a “champion” in their owner-manager, whose own values influence the strategy. In all of the companies interviewed the owner-manager was directly responsible for directing the CSR principles and activities of the company and moulding the company culture in his personal values and beliefs. All interviewed felt that their values were essential and a powerful driver of ethics and standard in the company. The entrepreneurs are also strongly involved in the well-being of the local community where they lives and where the company is placed.

A second level of analysis is relative to the definition of the positioning of the firm with respect to the map of orientations towards CSR. The firms considered (Table 4) possess characteristics of “cohesive” firms and of “multi-certified” firms20.

Tab. 4 – Types of orientations of the firms

BoxMarche Spa Cohesive firmBCC Gradara Cohesive firmGruppo FAAM Spa Cohesive firmGruppo Loccioni Cohesive firmGruppo FBL-Della Rovere Cohesive firmPRB Srl Multi-certified/naturally cohesiveTVS Spa Multi-certified/naturally cohesive

In the first group of companies CSR is translated this into business principles. CSR is the practical implementation of a company’s ethos.

The fronts of engagement and the forms of communication of CSR are systematic and creative and manifest themselves in a variety of forms: involvement, valorisation and formation of employees; transparency in processes and in the modes of governance,

presence of formal and informal instruments and procedures for internal and external informative disclosure;

manufacture of products of social and environmental merit; vast range of operations with the local community (donations,

sponsorships, promotion and production directed to projects of social, cultural, environmental, etc. merit);

relationships with non-profit organisations and associations;

20 Molteni and Lucchini (2004) identify a typology of orientations among Italian firms, based on two coordinates (intensity of the phenomenon – that is, the socially responsible behaviour – and qualitative aspects linked to the practice and to corporate behaviour): cohesive firms, multi-certified, aware, able to be mobilized, sceptical.

stable and durable collaboration with clients, providers, and financial partners;

attention to the global environment, across the activation of procedures and programs of environmental protection and of quality of life (recycling trash, reduction of emissions, saving energy, etc.).

On the whole, such behaviours increase the level of reputation and of consensus, and augment quali-quantitative development which, at the same time, “depends on” and “returns to” the territorial context in which the businesses are found. The understanding of benefits extracted counter-distinguish the Corporate Social Opportunity mentality (Grayson and Hodges, 2004) which characterizes these businesses. Eventual forms of incentives are not important: these firms “run by themselves,” they follow a path, understood the fact that “things can be seen with different eyes to obtain great outcomes” (P. Picasso).

The firms that fall into the second group are located among the “multi-certified”. The typical forms are found in their client offerings and in their requests to their own suppliers for ethical, social and environmental guarantees (green purchasing – ISO and Vision certification, quality of products, etc.). Although the orientation is more focused on procedural forms, diverse dynamics appear: they are multiplying the fronts of engagement towards CSR; they research more structured forms of communication (projects to implement their social and environmental reports); they implement modifications to their system of government (familial succession; new top figures – outside of the family – general manager, managing director). The providing of measures of support (fiscal incentives, ratings for the participation in public competitions and bands for favourable financing, personalized consultancy, adhesion to moments of exchange of good experiences) can accelerate their development.

5.3.3 CSR’s effects on governance

The third area of reflection more closely concerns the aspects connected to governance, which are presented below. Where there exists a family-based economic subject, even the

non-“directors” share moments of reflection around values, strategic orientation of the firm and the rapport among members of the family-based government and stakeholders.

In nearly all of the cases there was a strategic committee, in whose meetings those with distinctive competences who are responsible for the firm’s functioning participated.

Managers outside of the family were present (even in the position of shareholders): the figure of an authorized and “illuminated” general manager/managing director performed with efficacy the role of the entrepreneur’s alter ego and participated in the definition of strategic plans in which CSR was a substantial element.

Even in the absence of a supervising organ on the governance (audit committee) there were forms of “social control”.

In some enterprises (BoxMarche, Gruppo FAAM) the understanding of the necessity of separating house organs of governance and ownership was maturing, which contributes to the structure’s managerial evolution.

In diverse cases (FBL, TVS, PRB) the cohabitation and the generational passage were facilitated by a sharing of personal and familial values, as well as values of the firm, that found their synthesis in practice and in the instruments of social responsible management.

The frequency of meetings of board of directors is directed towards minimizing clashes and put to weekly meetings.

The board of directors looks inside to independent councillors and minority shareholders (including women) and is extended to representatives of dependents.

Tax breaks and services for partners and shareholders (specific initiatives, promotions, dedicated services and products; one can point out, for example, projects of formation on themes such as generational passage, tutoring activities – i.e. FAAM’s business school – or the facilitation institutionally provided of banks of co-operative credit).

Forms of participation in capital on the part of dependents are favoured; spin-off processes such as the Gruppo Loccioni’s way of growth, in which the birth of new enterprises often comes through co-opting talented business collaborators, and supporting them in assuming entrepreneurial roles.

Multifarious are their initiatives, of which one can report the most relevant. They are financed to make the function of the government house organs more transparent, beyond the aforementioned adoption of the cited instruments of CSR: sharing all of the management data with associations/shareholders/financial partners (BoxMarche presents an “enrichment” of the Global Report, addressed to the banks containing the prospective triennial economic plan); occasions of yearly open-house meetings during the year aimed at specific categories of stakeholders (Gruppo Fbl); regional and local meetings (TVS); holding stakeholders forums in

which the results achieved in the past financial year are presented and objectives for the future are discussed.

Value orientations and ethical principles that guide strategic decisions constitute the principle facets of the process of social accountability and reinforce the organisational culture. Even in the absence of specific centres of responsibility (CSR committees), limited to a few figures or operative “nodes” of social management (i.e. TVS’ working group Social Lab), the flexibility and cohesion of the structure, together with the direct involvement of the entrepreneur – the first “managerial agent” – makes the process of corporate social reporting and the development of specific skills easier.

Retribution and the compensation of business administrators, such as the distribution of profits, are illustrated in detail in the production statement and in the allocation of value added.

The instruments of accountability facilitate the transition from a state of listening to a proactive state (entrepreneur/management guided by stakeholders).

5.3.4 Mission, governance and accountability in “spirited businesses”

That which follows (Table 5), corresponding to the most significant elements pertaining to the relationship between values, mission, social engagement and commitment, and qualification of governance, some testimony – in the words of the corporate protagonists interviewed – is offered.

The centrality of CSR with respect to the development of these firms allows one to connote them as “spirited business” (Lamont, 2002) or as “CSR enterprise” (Kvåle, Olsen, 2006)21. They are high-performing companies where competitive success grows out of their commitment to values and to the human spirit. “Spirited businesses”, in other words, are “company with a soul” (Catturi, 2006). They are passionately committed to people and wisdom. A “spirited business” company focuses on vision and values, communication, top-level management commitment, effective tools and mechanism of 21 Based on empirical research conducted between 2005/2006 on a sample of 51 SMEs from diverse European countries the Authors distinguished three categories of businesses: “the business strategy enterprises”, which are making a conscious effort to implement CSR and have adopted CSR as a part of their business strategy; “the intuitive enterprises”, which are “doing” CSR without having made a conscious decision to do so. Their normal business practices coincide with CSR indicators; “the raison d’être enterprises”, which are “doing” CSR because it coincides with their business concept, i.e. the actual business concept is philanthropic” (Kvåle, Olsen, 2006, p. 7).

stakeholder engagement. Important principles of a “spirited business” include trust, vision, courage, community, creativity, patience, humanity integrity, diligence, enthusiasm and openness (Lamont, 2002). All companies espoused such principles when entrepreneurs/managers discussed what CSR meant and everything that they did was marked against those touch-stones.

Tab. 5 - Attributes of a “spirited business”

Play factors Case study examplesMission connoted by strong values (ethical, moral, social, as well as economic).

BoxMarche Spa“Perhaps it’s a little presumptuous, but we love to define ourselves as the agents of civilization. The small entrepreneur is a builder (of systems, of men, of wealth); he relates himself to the world, to his clients, to his community; he lives his passions, hopes, dreams, plans. The enterprise has a narrative identity, it tells a story, it constructs its own self. For this reason, it has a soul and it has those intangible assets linked to the spirit and to the dignity of the person.” (Tonino Dominici, Managing director and shareholder BoxMarche, Nomination 2005 Sodalitas Social Award, multi-stakeholder counterpart for the Italian CSR Forum)

Values guide the decision-making process in adherence to the socially oriented vision and create an entrepreneurial vocation that makes all the difference.

Gruppo Loccioni “Values sustain actions; actions that are positive and responsible generate a type of development that respects humans and the environment. (...) Large business “look to the quarterly reports” and are not disposed to sow the seed for the long term, to live on trust.” (Enrico Loccioni, entrepreneur of the year 2007, Ernst & Young Award for Quality of life)

The FAAM dream“The challenge of the market can be won on one’s values. FAAM operates at all levels so as to reinforce that criteria of social, environmental and regional respect that characterizes its activity. The recipe of FAAM on the path to development has Man as its endpoint. Our reality expresses the passions, valorises relationships, and communicates quickly to a territory attentive to traditions, towards which it nurtures a sentimental bond.” (Federico Vitali, President Gruppo FAAM, President Confindustria Marche)

BoxMarche Spa“Our Global Report is not only a report of numbers, but also of values. It permits our stakeholders to have a dependable idea of how the business fulfils that sort of delegation that civil society has conferred to produce a better world for all goods, services and human relationships. (...) First CSR, which is a fact of “faith”, then good governance, which is its outcome.” (T. Dominici, BoxMarche, Italian Oscar di Bilancio 2007)

The attention to people’s lives creates a supportive environment and renders possible the maximization of creativity.

Gruppo Loccioni“Ours is a mode of being an open enterprise from the very beginning, born to welcome interlocutors as carriers of value; formation, collaboration, team work are our practices. (...) From a strong shared culture and from driven human resources can raise the commitment for the Common Good and the strength to face the market.” (E. Loccioni)

BoxMarche Spa“The technology we are most proud about is the one that comes home in the evening.” (T. Dominici)

Gruppo FBL-Della Rovere

“We are a company made up of people. Strong human relationships unite the network, which throughout the years has been consolidated, transmitting experiences and visions that are at the foundation of our success. Our activity is the carrier of change both in the lives of our clients and around our team.” (Roberto Forni, General Manager Della Rovere)

Inserting everyone into the centre of the company and rendering it a protagonist of CSR.

BoxMarche Spa“From the very beginning I have felt welcome, like a part of the family, and I’ve been given the trust necessary to grow. I’ve done, and I continued to do, my best to personally embrace those same values and to experience the company like a communal good, recognizing the entrepreneurial spirit that I’ve had the good fortune to know” (T. Dominici)

Holistic approach to CSR.

PRB Srl“The company acts as an interpreter of social and environmental concerns, making good of its own job, generating profit in a responsible way with respect to its economic partners, its community and its environment.” (Paolini Fiorella, entrepreneur, President Gruppo Giovani Confindustria Pesaro-Urbino)

Development of intangible resources.

Gruppo Loccioni“Our intangible values: imagination (to know how to create), energy (to achieve our dreams), responsibility (for the air we breathe, the land we walk on, the resources that we utilize, the trust that we gain.” (E. Loccioni)

The generation of profit is necessary to the success of CSR, but its maximization is not the raison d’être of the business.

Gruppo FBL-Della Rovere “There are three ways of being a leader: through price, through technology, through intimacy. This is our way. My greatest satisfaction is when I see others happy.” (R. Forni)

BCC Gradara“Our bank is leveraged on one attitude: proximity, which is physical, relational, family-oriented, oriented to our associates, to the personalization of products and services. That means identifying oneself with the local economy, starting from the region and having the capacity to render it a protagonist. The components of board of directors are exponents in the areas in which BCC operates and it has committed itself on its own honour to create social values for its associates and for the community.” (Luigi D’annibale, General Manager BCC Gradara)

The entrepreneur-proprietor is responsible for the principles and the actions of CSR.

TVS Spa“He who has the economic power must be the one most responsible. We are certain that CSR grows stakeholder value, social consensus, economic value, originating more trust and understanding and the best transparency to governance. In this sense, what’s central is the example top management sets.” (Giorgio Arvizzigno, Director of Product Development, Quality Control and Social Responsibility TVS)

Source: our adoption of Lamont, 2002.To offer a concrete example of such forms of stakeholder

engagement, the following provides a brief synthesis of several projects produced by one of the firms considered (the smallest one!), BoxMarche Spa and a list of some of the awards obtained by this company for its excellence in CSR (Table 6).

BoxMarche’s first project carried the title, “The passion for improving activities for a responsible business model.” With this project, the firm participated in the third edition of the “Sodalitas

Social Award”22 and in 2005 came in first place in the SME category. The second concrete example pertains to the Italian Prize for the Social Responsibility of Businesses given to 24 companies in 2005, and awarded to BoxMarche for being “a solid reality that donates 15% of its earnings in corporate giving, and pays close attention to the environment, research and development, and society.”

The third relates to the Balance Oscar 2007 (Milan, Piazza Affari), in which BoxMarche won first prize for the category of Medium and Small Enterprises, thanks to the 2006 Global Report, cantered on the innovation of the “3Ps”: Products, Processes and People.

The fourth is the Confindustria Award for Excellence, given to BoxMarche in 2006, for being a “business champion for the valorisation of the territory.” This initiative was promoted by Confindustria with the objective of identifying and recognizing the capacity of businesses to be important actors in their territories, not only in the economic-productive reality, but also as subjects attentive to social, environmental and cultural needs of institutions, to the needs of its workers and to the ecosystem in which they play a part. Thus, in 2007, the business obtained the Prize “Valore Lavoro” for the Marches Region, assigned to the 10 best Marchegian firms, distinguished for their contribution to best practices in the quality of work.Tab. 6 - A long history of events, awards and recognitions: Milestones of BoxMarche Spa

1985 Award, Course of Managerial Education1989 Adoption of “Quality Please” project (Assindustria Ancona)1992 Club Quality (Assindustria Ancona)1995 International Study Exchange in the United States; meeting with JURAN

(seminar, “Making Quality Happen”)1996 ISO Certification of Quality 90021999 Participation in the Quality Awards Italy2001 ISO Certification of Quality 90012001 Honourable mention, regional Quality Awards Italy2001 Quality Award San Marino2001 Certification of the Production Site according to ISO norm 14000 –

environmental certification of the production site2002 ISO Certification 9001: Vision 20002003 Special Mention, environmentally-friendly planning –Ecopremio2003 Quality Award Italy for SME

2003/2004 OHSAS Certification 18000 – management system of health and security in the workplace

22 The Sodalitas Social Award honors businesses that operate in Italy who are distinguished for the production of projects with high value and social content.

Certification SA8000:2001 – management system for socially responsible management

2004 Publication of the Social Balance award, 20032004 Riciclo Aperto Award – Comieco2005 Winner, Sodalitas Social Award for the category “SMEs”2005 CSR in Pole Position23

2005 National Award for Social Responsibility in Business2005 Recognition of benevolence, Città di Corinaldo2006 Official Selection at the II° European MarketPlace on CSR24

2006 Compilation of the first Global Report2006 Nomination, Oscar di Bilancio 2006 (FERPI)2006 Registration according to Regulation CE 761/01 (EMAS)2006 Adoption of the European Roadmap on CSR2006 Confindustria Awards for Excellence, “Business champion of the valorisation of

the territory” section.2006 Multi-stakeholder Panel2006 Forum “Intangible Capital”: a strategic factor for innovative businesses2007 Winner, Oscar di Bilancio 2007 in the category of Small and Medium-size firms

(FERPI)2007 International Award ECMA, Pro Carton Award, Confectionery category2007 Valore Lavoro Prize for the Marches Region

Fonte: Our elaboration from BoxMarche’s Global report 2007.

5.3.5. The “convivial enterprises”: taking root in the local context

There are essentially three strong points of Marchegian SMEs: a rootedness in the territory, familial synergies and tenacity. Among these the first, which finds expression in the adhesion to and in the social consensus of the territory, construct an emblematic aspect that makes the Marches a territory of genius loci.The cases considered present evident profiles of that genius loci marked by work ethic, by a strong sense of feeling like active members of one community in which each person rediscovers the taste and the utility to work with trust. This mode of operating and being characterizes the many enterprises who were born under intensely local conditions but who serve as carriers of Italian creativity and talent into the world at large. They plunge their roots into a territorial model based on “holy agriculture” (Fuà and Zacchia, 1983) that has characterized the Marches Region from the first half of the 1800s to the post-WWII era. These “champions” of CSR, inserted into a territory rich in testimonies of socially responsible behaviours, many

23 Boxmarche is among 30 Italian firms selected by the Italian Ministry of Work and Social Policies, and by Confindustria to be honored for best practices of social responsibility-CSR.24 BoxMarche was placed in the category, “Skills and Competence Building”; it won the title of best practice: “People Care-Skills Passport Project”.

of whom must yet emerge, are also due to their ability to communicate their own engagement and to their ability to manage relationships with multiple stakeholders. They demonstrate themselves capable of influencing and of moulding the socio-economic terrain from which they come. And this comes from the richness and the appeal of their own virtuous testimony, called to “imitate the virtues.”

Indeed, the thoughts of one entrepreneur interviewed articulates this best: “We have an emotional tie with the territory. We want to use our abilities to sustain the local economy. Absolute priority is given to values, to human relations. Our activities are not only business choices. Our ability, though we are a small firm compared to other companies, is to card threads (through the determination to follow the “dream” of an enterprise and of the environment in which it is inserted), is to pull thread (through cohesion and collaboration inside and outside of the firm) and to stretch thread (through the motivation that feeds creativity, understanding, sensibility, the capacity to listen) of a network. A network made, in primis, by Men.”

The profiles of “convivial enterprises” (Balloni and Trupia, 2005) that emerge do not correspond to a codified managerial model, but to a business “way of being” in which conviviality is not merely a sentiment, but is an operative practice for organisation and governance. In such contexts the capacity of individual initiatives, in absence of rigid forms of hierarchical coordination, remains vibrant. It is spurred on by the sense of belonging (the status of the collaborators prevails in the organizational arrangement) and on diffuse empowerment. That which is given achieves superior goals with respect to the forms of government that privilege the achievement of objectives in the logic of “executiveness” based on a system of checks and balances. “Enlarged” governance and control is a sort of “effect” of a socially oriented philosophy and of the relative instruments of accountability, which institutionalize and give representation and transparency to the qualities of the firm. These last elements signal the passage from one model of informal responsibility, still prevalent in the universe of small-sized firms, towards a new, proactive model “from the concept of enlightened entrepreneur to CSR policy.” Regarding the stakeholders, it is all about sociality and “is strongly inspired by a sentiment of collaboration, of ‘conviviality’”. This is a manifestation of an attitude of learning by interacting, which translates into planning, innovation and more generally, the capacity to improve relationships and the territory itself, by tying multiple interlocutors together in a network that sees a good part of its actors coming from the same territory. For example, client relationships are characterized by an attention that goes beyond customer care; those with dependents go beyond ‘paternalism’: the Marchegian entrepreneurs who have

been able to create a community of people who work passionately, are also loved by those who have the fortune to work with them. Also in relationships with local and political organisations, the search for collaboration feeds a dialectical comparison.

The second of these aspects refers to the active involvement of the enterprise in local development, because the business’ success comes from the same steps as that of the territory. This translates into the creation of functional networks among businesses, Chambers of Commerce, trade associations, banks, non-profit and local organisations - which all become nodes of a cooperative network whose end is to develop the territory.

An examination of the economic realities of the Marchegian territory, formed predominantly by SMEs, and which attempts to understand the essence of the people and their history, allows one to more closely view an entrepreneurial system constructed on solid principles, capable of marrying ethics and business and of confronting the challenge of globalization using the categories of “good” and useful. And it allows one to discover evidence of a “gentile capitalism,” which expresses itself in a development model founded on the synergy between the recuperation of the past, defence of traditional understandings, of local culture, of the quality of the landscape and its protection for the future through research by advanced sectors and care for the environment. It also allows one to discover an indirect but important protagonist: the territory of the Marches.

Alongside the desire to invent new products and to make a profit, one of the principle motivations of Marchegian entrepreneurs is the desire to do something useful for its own community (Balloni and Trupia, 2005). This is because the histories of their businesses have always been founded on “passion” rather than merely on calculations. Enterprises are considered spaces to consolidate and nurture a passion for quality, for understanding, for a form of development that engages and respects the surrounding environment. The socially oriented entrepreneur is moved by the reciprocity of the exchange, enriching the territory in the form of jobs, business opportunities for other subjects, cultural initiatives, promotion and the development of the place of origin.

Diverse studies have analyzed the processes of industrialization diffuse in the Central-North-East Italy within which lie the Marches. Some have identified factors such as the culture, history, institutions, beliefs and communal convictions, like a sort of humus of the intangible assets of the context, difficult to define and to quantify (Cipolla, 1990). The intangibles or social capabilities thus correspond to a genius loci, connected to a particular place. It is revealed in the

way of living and being a community and therefore even of the business and that from which it comes.

The socio-economic texture, defined in terms of “social capital,” social capabilities or civic-ness, is enriched by values, cultures and traditions tied to a specific community-space. It is therefore important to also look at those intangible factors that favour the development of CSR and to the sustainability of the SME.

5.3.6 From CSR to TSR –Territorial Social Responsibility

Another development in the CSR debate can consider the following question: “Do best practices of CSR increase social capital of the territory?” If yes, then what role do SMEs play in constructing the structural components of the territory?

Social Responsibility of the Territory is a concept that has thus far not been adequately studied. From the concept of social responsibility of the business, the perspective shifts to a vision of the collective. No longer is responsibility solely the realm of the individual firm, which is called to put itself in relation to the collective, but rather it is the whole community, the territory, which comes to be conceptualized as an unicum. The application of social responsibility of a business to the territory finds force in the objective of improving the community’s quality of life and of marrying economic events with social and environmental attention through the lens of sustainable development. Social responsibility of the territory is founded, therefore, on the rediscovery of shared values that the territory’s economic, social and institutional actors know how to reinforce, thanks to solid networks of relationships.

Today, the Marches - along with other Italian territories such as Tuscany and the Veneto - offers an interesting laboratory to study not only the extent of CSR, but also Social Responsibility of the Territory.

The initiatives of the Marches Region (i.e. the SIRM project - System of Responsible Business for the Marches Region - created between 2005-2006 constitutes a primary “ethical territorial network”) and of the state legislative bodies, in particular, have advocated both for paying close attention to civil society through corporate responsibility and for favouring the adoption of best practices on the part of individual firms.

The best practices of socially oriented Marchegian SMEs contribute to a model of territorial development that progresses in the particular socio-economic context of the Region. This possible way of experimenting with CSR in the territory points above all to the value of participation, respect, and the recognition of roles, starting with the

SME and the socially oriented entrepreneur. The model’s protagonist, therefore, is an “enlightened” entrepreneur, who - other than generating opportunities for work and creating high-quality products - fosters the sustainability of a collectiveness in the territory in which it lies. Marchegian SMEs that create distinctive features of CSR in their own mission, governance and accountability release energies and are orientated towards sustainable development. They represent actors who enter into relations with all of the realities that participate in the construction of welfare and to the production of wealth, dominated by a paradigm of CRS focused on its more ample diffusion.

Recognizing the cultural dimension of CSR, its connection with anthropological and environmental factors present in the given territory (such as the Marches), therefore widens the field to a dimension that is not only operative, but strategic when the relationships between actors in the territory’s network are oriented towards affecting responsible, equal and sustainable development, which involves and benefits all of the subjects who operate in a territory (and not only them).

The territory thus becomes the place in which avenues of sustainable development can be concretely constructed. Together with the enterprises, network actors, the first of whom were active promoters, play a propulsive role. In all of these cases emerges the value of the producer of tangible effects at the local level, in terms of quality of life of the people and of functions of local welfare: work, home, help, social services, health, services for workers and training.

In this context one well understands the dimensions of freedom, solidarity and shared responsibilities put into motion a mechanism that mobilizes the intelligences and creativity, and which goes beyond economic data and provisional balances of the firm. Too often the preoccupations of the manager focus on satisfying the majority shareholder. CSR of the “territory’s SMEs” is intended to better articulate the participatory dimension: not only the shareholders are to be satisfied, but the citizens and the territory in which the business demands, as well.

The territory therefore becomes a terrain on which reciprocal approaches can be forged. It becomes a subject and a protagonist. And the network that developed activates new mechanisms of participation and planning, and allows for the recuperation of its territory’s identity. Territorial networks can become a true laboratory of CSR where mechanisms of plurilateral plans can be experimented whose protagonists do not work against national and supra-national sustainable development programs, but integrate (or sometimes even substitute) them. Finally, the ample size of CSR also involves a spatial

dimension. This latter also has a local aspect, which can synthesize itself with the theme of the territory which, in a robust sense, serves as both the main judge and, at the same time, the main beneficiary of the socially responsible components.

Socially oriented “country governance” or “local governance” (Balloni and Trupia, 2005) is made possible by an integrated representation of social, economic and institutional communal feeling, not sectorial like for the districts, but like that of a territory. Throughout the years, in diverse districts, the deterioration of the socio-cultural (and not only industrial) atmosphere has made the relationship between economy and society, and between the firm and the environment, more difficult. When small and medium centres search for rapid and extensive development, they have mutated their own nature, and, at the same time, lost part of their social ties and their local identity, because of a decline in social consensus with regards to industry and industrialization. Only in those territories, like in the Marches, developing networks between economic actors and actors coming from civil society and from local politics, territorial closeness will concretize in terms of reciprocity of exchange, of tradition, trust, identity, and will create a heritage of understanding, relationships, of images and values that are rare “goods” in an era of globalization, to be stewarded and grown, able to stop injustice and insecurity in moments of difficulty like today.

6 Concluding remarks

The benefits of CSR are not always easily quantifiable. For that reason, one can say that the adhesion to a philosophy of socially oriented management is above all an “act of faith” (Jenkins, 2006a)25

but these benefits closely touch on governance and, especially in small firms, the link among philosophy cantered on sharing CSR, strategy, governance and accountability is even more significant.

First, because the process is desired by the entrepreneur and reverberates across his style of government, each expresses the will of the firm and translates it into the operations of the business. And this often becomes an occasion to reinforce the mission and, often, to create that necessary convergence around personal, family and firm values, which facility the succession process in many family businesses.

25 “CSR is the practical implementation of a company’s ‘ethos’” (…) philosophy and vision are based on five key principles – integrity, humanity, diligence, enthusiasm and openness” (Jenkins, 2006a, p. 6).

Second, because the influx on the strategic profile is manifested above all in terms of development of the culture of CSR, it is a process that seems to be the fruit of the entrepreneur’s intense and sincere involvement in the multiple manifestations of socially responsible actions. Thirdly, this is because the accountability and the communication of the firms’ CSR engagement creates effects on the organisational structure: it influences the micro-processes of the firm and produces effects induced by the governance, in terms of transparency of the decision-making process, the sharing of corporate policies, the diffusion of the instrument of delegation, greater team participation by the top of the decision-makers in the firm, and the multiplication of formal and informal occasions for reflection and for comparison.

From the cases considered here, a model characterized by forms of stakeholders relationships based on instruments that provide for transparency and representation of those qualities of the firm and its principle actors arises. Through this way, one can view the co-penetration of the two drivers of socially oriented governance: discipline and commitment. The first is formalized and codified, the second is informal, emergent and value-based26.

In the SMEs where CSR is a characteristic trait of the corporate culture, the consensus of the owner-entrepreneur/top management and the focus on referents at the base of decisions characterize systems of corporate governance that are more transparent and “harmonized”, reinforce the organizational cohesion, the business climate, and the trust factor (commitment).

The social strategy of the enterprises observed is based on an effective government of systems of relations within the firm whose principle actor is the owner-entrepreneur/manager. The successful entrepreneur always appears to be the one who helps to rediscover values, and who is capable of creating solid rapports and “true” relationships with interlocutors. The focus is on his moral level and on his capacity to realistically create an ethical corporate culture, a unified cultural environment, a common language and, in other words, for a socially oriented governance.

Equally emergent is the value of trust and of true relationships with respect to governance, nurtured by the desire of the top level in 26 “While the first one is a formal, codified, explicit approach aiming at fostering ethical and social behaviour through a set of rules and tools, the second one is often a more emergent, value-based, “strategy driver” approach, that leads employees to a strong CSR commitment through a high level of identification in their company’s strategy, deeply embedded in a set of values and based on a non-hierarchical set of both economic and social goals” (Minoja and Romano, 2006, p. 3).

deciding and in acting in coherence with a given platform of values. They mould the rich fabric of values of all who operate in the enterprise – from those with management responsibility to those who work at various levels in the company – and are innately linked to morality. Beyond the formal application of formal methodologies those businesses are able to taking on efficacious forms of engagement and stakeholders relationships, so that they are capable of “grasping their essence,” pinpointing their expectations, responding to and offering solutions, and creating cohesion around projects and values of ample breadth. These are testimonies of entrepreneurial passion; they are given organisational strength and intangible riches.

The Marchegian model of sustainable development that appeals to the territory’s businesses is premised on a challenge: the capacity of the whole productive, associative, unionized, entrepreneurial and institutional world to act and to be made to act in socially responsible ways, and thus capable to be territorially characterized in a unified sense.

In the face of large-scale corporations’ power and impact, however, one cannot but mention the possible new and important role of small and medium-sized businesses in providing examples of, and “driving,” real means of good governance – many of which truly spring from that family-based world of capitalism, often criticized –, which hosts precious testimonies of integrity strategies (Paine, 1994), capable of generating trust towards the firm and the entrepreneurial conduct. This permits us to conclude by affirming that between CSR and corporate governance there exists a successful nexus. SMEs are especially revelatory, because it is not essential that the extraordinary or eclectic actions are prominent, but rather that those exemplary ones stand out, they bear small things with great intentions… Because CSR needs passion and hope.

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Author Biography Mara Del Baldo is a researcher at the Management Studies Institute of the Faculty of Economics at the “Carlo Bo” University of Urbino in Italy. She teaches the course in Economics and Small Business Management and collaborates on diverse seminar projects on the topic of Economics and Small Business Management.Her main research interests are related to economics and small business management and, in particular, are focused on the following subjects: logistics management in the context of SMEs as well in small-sized logistic firms; ICT for management control purposes in SMES; Basel agreement’s effects for the development of SMEs; corporate social responsibility, and small entrepreneur/SMEs business ethics. Concerning the aforesaid topics Mara Del Baldo has produced various research papers published - above all - in Italian journals (Piccola Impresa/Small Business, Sinergie, Economia Aziendale Online), besides presenting them at national and international conferences.