Editorial: Governance and accountability (Gover-nability) of multiple values of municipal corporations

Municipal corporations (MCs) have been established across the world to provide local public services (e.g. infrastructure, utilities, education, healthcare, cultural and social services), influenced by new public management doctrines and related neoliberal ideologies (Thynne, 1994; Grossi and Reichard, 2008; Argento et al., 2010; Van Genugten et al., 2023; Bergh and Erlingsson, 2024). Corporations owned by municipalities (i.e. MCs) pursue public purposes while utilising private sector managerial practices and structures and are labelled “hybrid organisations” (Grossi et al., 2022; Vakkuri et al., 2021). “Compared to the traditional bureaucratic model, MCs have more legal and managerial autonomy, are generally less constrained by laws that regulate use of public resources and are typically able to implement much more flexible personnel management practices” (Bergh et al., 2022, p. 75).MCs' hybrid organisational nature implies that their governance is permeated by multiple values, impacting the extent and forms of accountability (Nieukoop, 2024). While MCs' growing use is justified by promises of more flexible and efficient public service delivery, doubts remain concerning their transparency and capacity to better satisfy citizens (see Bergh et al., 2022; Bergh and Erlingsson, 2024).While literature on the complexities of MCs' governance and accountability has grown (e.g. Andrews et al., 2020; Voorn et al., 2019; Voorn and Van Genugten, 2022), more focus is required on how different actors (i.e. board members, auditors, controllers and CSR managers) and their values affect goals in hybrid MCs and on their role in developing governance and accountability practices that protect public value creation (Grossi et al., 2022; Maine et al., 2024; Maine, 2025). Limited research explicitly focuses on different actors' roles in designing and implementing governance and accountability practices in hybrid organisations (Skelcher and Smith, 2015). Given the multiple values embedded in MCs' operations and outputs, their outcomes need to be controlled and assessed through multiple performance dimensions mirroring their hybridity (De Waele et al., 2021; Krause and van Thiel, 2019; Krause and Swiatczak, 2021; Krause et al., 2024).Therefore, more research is needed to explore MCs' internal dynamics as hybrid organisations (Pache and Santos, 2013; Seibel, 2015), seeking more in-depth insights into internal governance and accountability practices, rather than investigations “from the outside” or interpretations based on different formal documents (Grossi et al., 2017). Overall, improved theoretical and practical understanding of the drivers, obstacles and tensions for value creation and the accounting implications in municipally owned corporations is needed.In collaboration with the International Centre of Research and Information on the Public, Social and Cooperative Economy (CIRIEC), the International Journal of Public Sector Management's (IJPSM) special issue on “Governance and accountability (govern-ability) of multiple values of municipal corporations” was launched, aiming to explore the role of governance and accountability practices regarding hybrid MCs' multiple values, particularly focusing on societal and public values. The call for papers welcomed theoretical, conceptual and empirical submissions from different institutional contexts and by scholars across disciplines. It invited contributions addressing research questions including, but not limited to, the following.An online workshop on “Governance and accountability (governability) of multiple values of municipal corporations”, on 21–22 September 2023, stimulated an initial academic debate around the research questions. Seven papers were presented, and interesting discussions emerged with the support of each paper's appointed discussant and workshop participants. Professors Jan-Erik Johanson and Jarmo Vakkuri from Tampere University, Finland, also hosted a plenary speech on “Governing multiple values in hybrid organisations”.The IJPSM special issue received 19 valid submissions, screened by the guest editorial team. Seven manuscripts underwent review, and three were accepted for publication. These articles present relevant perspectives on MCs' governance and accountability and will be discussed hereafter. After a brief description, the three articles will be comparatively discussed by focusing first on their contribution to furthering our knowledge on MCs' governance and then on accountability practices and tensions.The special issue's three articles deal with different, albeit connected, aspects regarding MCs’ governance and accountability. Specifically, the first article, “Flexible gender targets with mandatory reporting: introducing a governance innovation for accountability, public values and social sustainability”, by Ulf Papenfuß and Christian Arno Schmidt, shows that mandatory reporting requirements (i.e. mandatory regulation) increase German MCs' accountability on flexible gender targets. Compulsory disclosure of flexible gender targets is a governance innovation, strengthening accountability and supporting public values in MCs. However, despite mandatory regulation improving accountability, overall compliance with reporting requirements remains limited, indicating the importance of combining mandatory and self-regulation in the form of public corporate governance codes in policy fields such as gender equity (Papenfuß and Schmidt, 2026).The second article, “Formal control and trust in monitoring financial accounting outsourcing in hybrid organizations – a multiple case study of municipally owned corporations”, by Flinkman et al. (2026), focuses on formal and informal controls used by Finnish MCs to monitor outsourced financial accounting services. Across three case studies, the authors find that while monitoring at the strategic management level heavily relies on formal control, monitoring at the operational management level increasingly depends on trust-enhancing mechanisms like joint development groups. Overall, the study shows that hybrid organisational forms shape how trust and formal control interact in managing outsourced financial accounting services (Flinkman et al., 2026).The third article, “Accountability and governance in municipal corporations: insights from negotiated order theory”, by Özgün Imre explores how governance and accountability in MCs are dynamically negotiated. By adopting the Straussian package and using the historical case of the First Vienna Mountain Spring Pipeline in the 19th century as an example, the article illustrates how accountability and governance issues can be co-constructed through negotiations involving multiple actors from different social worlds (Imre, 2026).A central aim of this special issue on governability of multiple values in MCs was to explore the role of governance practices to further our understanding of how these organisations balance multiple values. One important contribution from the special issue's articles is shedding light on governance's role in balancing hybridity. A comparison of the articles shows how by applying different theoretical perspectives, ranging from control-based to relational and interpretive approaches, governance can be positioned along a continuum from formal to informal mechanisms.Papenfuß and Schmidt (2026) represent the formal end of the governance continuum (see Table 1). With a departure point in publicness theory, the authors analyse to what extent self-regulation influences compliance with mandatory reporting on gender targets. Focusing on formal governance structures is mandatory; combined with self-reporting, they illuminate both the benefits and shortcomings regarding formal governance structures' ability to balance multiple values in hybrid organisations. Papenfuß and Schmidt (2026) highlight the institutional architecture of public–corporate control, leaving the micro-foundations of relational governance largely unexplored.While Papenfuß and Schmidt (2026) focus predominately on formal structures, Flinkman et al. (2026) occupy an intermediate position between formal and informal governance. Combining control archetypes with the concept of trust, they clarify the need to balance control (formal) with trust (informal) in the governance of multiple values. Governance is understood as a balance between formal control (e.g. ownership policies and reporting systems) and informal trust (e.g. mutual understanding, shared norms, and professional judgement). The article provides a more dynamic understanding of governance.Imre (2026) argues that governance capacity in MCs often resides less in formal instruments than in social capital, mutual trust and relational competence. The study conceptualises governance not as a set of rules or frameworks but as a web of relationships, interactions and shared understandings between political leaders, executives and professionals. By foregrounding informality, Imre (2026) challenges the implicit assumption in much governance research that rules ensure accountability.Table 1 categorises the special issue's articles by highlighting the governance mechanisms studied by the authors and their degree of formality (see Table 1).By positioning these studies along a continuum from formal to informal, it can be argued that effective governance in MCs is the result of an interplay between different layers of governance: institutional (rules), organisational (interaction) and social (relations). The three perspectives are therefore not mutually exclusive but cumulative. Together, they illustrate an ongoing shift in the study of governing MCs: from viewing governance as compliance and structure (structural-formal) to understanding it as relational and the result of sense-making (informal).Studies with a structural-formal perspective address various topics, using theories such as agencification, agency theory and resource dependency theory. One important topic is the corporate governance of MCs, including board structure and composition (e.g. Andrews, 2025; Papenfuβ et al., 2018; Erlingsson and Bergh, 2018), boards' remuneration (e.g. Papenfuβ and Schmidt, 2021) and the use and effects of corporate governance codes (e.g. Papenfuβ et al., 2018). A second is the ownership structure of municipal corporations (MOCs). Studies on this topic analyse the governance challenges related to the multiple principal problem and to mixed ownership of public and private owners (e.g. Sørensen, 2007; Voorn et al., 2019; Da Cruz and Marquez, 2012). A third feature is the legal form or status of MCs and related legal and managerial autonomy (e.g. Papenfuβ and Keppeler, 2020; Papenfuβ and Schmidt, 2022; Van Genugten et al., 2020, 2023; Grossi and Thomasson, 2023).The informal perspective addresses cultural-cognitive governance features. The literature primarily focuses on boards and/or chief executive offices (CEOs) of MOCs, for example, board behaviour and efficacy (e.g. Krause et al., 2024) and on different (views on) roles of boards and CEOs (e.g. Thomasson, 2009; Olsen et al., 2017). Institutional theory and the institutional logics perspective dominate.The literature also addresses the complementarity and interplay of both perspectives. These studies focus mainly on municipal owners' governance of MOCs. For example, Berge and Torsteinsen (2023) address the influence of structural formal features and cultural distance on municipalities' governance control of MCs. Krause and Swiatczak (2021) study the interplay of formal types of control used by municipal owners and informal contingencies such as trust. Voorn and Van Genugten (2022) analyse municipalities' use of formal and informal coordination in multiple principal settings. Finally, Krause and Van Thiel (2019) study the relationship between inter-organisational control mechanisms, perceived managerial autonomy and policy-profession conflict in MCs' governance.Hence, these three articles contribute to existing literature on the governance of MCs by nuancing our understanding and framing of governance formality perspectives.Another aim of this special issue was to explore accountability practices' role to further our understanding of how these organisations balance different accountability tensions arising from the co-existence of multiple actors, values and audiences. The articles contribute by elucidating accountability practices' role in balancing accountability tensions.Previous literature pointed to MCs' constant need to balance tensions across efficiency, political responsiveness and public value creation (Grossi and Reichard, 2008). Political influence on MCs' functioning and decision-making processes has raised questions about accountability and balancing corporate objectives with public interests (Rajala and Kokko, 2022). That is, MCs deal with balancing instrumental accountability and relational accountability, given their efforts to align financial sustainability with their social mission (Maine et al., 2024).Interdisciplinary literature highlighted three main accountability tensions regarding multiple actors, multiple values and multiple audiences in hybrid organisations including MCs (Grossi et al., 2024). The first concerns the unstable boundaries of hybrid organisations moving from single organisational boundaries towards networks and operating at different hybridity levels (macro, meso and micro levels). The second tension concerns multiple values, which extend beyond financial to societal, human and societal values, requiring the development of multidimensional accountability practices. The third emerges due to the multiple forums beyond shareholders, requiring accountability practices to generate dialogues with multiple stakeholders.The special issue's three articles (Papenfuß and Schmidt, 2026; Flinkman et al., 2026; Imre, 2026) focus on different accountability tensions and practices regarding multiple values and multiple actors in the context of different types of MCs (owned by a single municipality/city state or by multiple owners) operating in different European contexts (German cities; three Finnish MCs providing societal services in the fields of education, waste management and housing and the water company in Vienna).Table 2 categorises the articles by highlighting the accountability tensions and practices identified in the studies.Papenfuß and Schmidt (2026) show that introducing mandatory reporting requirements led German cities and city-states to increased MCs' public value of accountability and equity. They contributed to the growing debate on sustainability reporting in the case of MCs as hybrid organisations (De Waele et al., 2021; Grossi et al., 2022; Maine, 2025). The interplay of mandatory and self-reporting of flexible gender targets represents a promising contribution to the emerging scientific debate on accountability and equity in public and hybrid organisations.Flinkman et al. (2026) examine how strategic and operational management levels combine formal and informal accountability mechanisms to manage appropriation concerns and coordination costs in inter-organisational relationships established by three Finnish MCs with their financial accounting service providers. By showing the interplay between control and trust, covering dimensions of ownership and different accountability mechanisms' use, they contribute to previous research on trust and traditional forms of accountability in MCs as hybrid organisations (e.g. Krause and Swiatczak, 2021; Argento and Peda, 2015).Imre (2026) applied the Straussian package, comprising negotiated order theory, to the case of Vienna's water company, illustrating how multiple actors (e.g. technical experts, municipal servants or public interests' representatives) influenced accountability tensions emerging at the macro level (e.g. securing safe public water), meso level (e.g. financing and planning decisions) and micro level (e.g. negotiations among individuals). The Straussian package proves useful to emphasise the importance of actively managing relationships and negotiations with multiple audiences and arenas beyond formalised structures. This study, therefore, contributes by raising awareness of the need for negotiated accountability in the context of MCs.This special issue feeds the considerable academic interest in MCs characterised by hybridity, which influences their governance and accountability (e.g. Andrews et al., 2020; Voorn et al., 2019; Voorn and Van Genugten, 2022). Its aim was to explore governance and accountability's (governability) role regarding hybrid MCs' multiple values, particularly focusing on societal and public values.The call for papers invited contributions on conceptualising, evaluating and measuring MCs' multiple values and performance dimensions and how hybridity shapes value creation and the forms of accounting and accountability used, how MCs govern multiple, often conflicting, values (e.g. financial efficiency, public value, social and environmental goals) and how governance and accountability practices are shaped by organisational actors and stakeholder participation to protect public/societal values.The editorial team coined the encompassing term, “govern-ability”, understood as hybrid MCs' capacity to navigate and balance (i.e. “govern”) the multiple, often conflicting, values characterising their institutional context, while simultaneously remaining accountable for their choices. MCs must have the “ability” to be accountable for how those values are prioritised, enacted and measured. Governability reflects MCs' responsibility to justify these priorities and the resulting outcomes through transparent metrics, wide reporting practices and participatory forms of accountability.Following a blind peer-review process, three articles were included. The studies by Papenfuß and Schmidt (2026), Flinkman et al. (2026) and Imre (2026) all offer interesting perspectives on governability by emphasising the need to further focus on informal governance mechanisms and consider accountability on different levels of analysis, including the role of negotiations.These articles point towards several further research avenues. While recent research gradually has applied more informal perspectives on governance, the literature remains dominated by studies focusing on the more structural and instrumental sides of governance mechanisms: a balance that future research must continue to theorise and empirically explore.Multi-level (macro, meso and micro levels) and longitudinal analyses, tracing how governance (formal and informal) mechanisms and accountability tensions (regarding multiple actors, values and audiences) evolve over time and across different organisational levels, are also needed. Future governance studies could explore how moments of crisis, reform, sustainability transitions or leadership change recalibrate the control–trust balance. Future accountability studies could capture interactions between external pressures at the macro level and internal dynamics at meso and micro levels.Moreover, further qualitative in-depth and longitudinal research is needed into individual narratives, internal dynamics and behaviours to capture the complexity of the micro-level nature of MCs' governance and accountability changes (see also Maine, 2025). Finally, future research could integrate institutionalism (not just institutional logics but also institutional work and entrepreneurship) and governance theories to conceptualise accountability as a socially produced outcome, rather than a pre-given structure, allowing scholars to examine how legitimacy and responsibility are enacted through daily practices.