Corporate Governance in Europe: An Empirical Analysis of the Italian Case Among Non Financial Listed Companies

Abstract

This paper has investigated the main features of the corporate governance system in Italy within a European perspective. The results of the research conducted among Italian non financial listed companies have been analysed and discussed in terms of issues such as ownership and control structures, executive remuneration and evaluation, the mission of the companies, the role of banks and other financial institutions, capital market and market for corporate control, employees, and the structure and the functioning of the board, considering the role of the chief executive officer, its separation with the role of chairperson, the role of the non executive directors and of the internal audit committee. The particular issues of corporate governance determined by the presence of the blockholder have been analysed. Furthermore, the potential changes on corporate governance that may derive from the Draghi reform in order to provide a solution to the problem of the unsafeguarded interest of the minority shareholders have been briefly underlined. The characteristics of the Italian corporate governance system have then been discussed in comparison to the main corporate governance systems in Europe: France, Germany and the UK. The intent was not to decide which of the corporate governance systems is the best and should be used as a benchmark, rather to explore the differences among the systems and to analyse the relevance of the cultural, historical, and institutional factors as well as some economic factors such as the ownership structure and the degree of separation between ownership and control. Both the so called nation effect and the ownership structure appear to be relevant in defining the issues of corporate governance. In some cases the reality sees the former prevail, whilst in others the latter does. Within a European context, the Italian system of corporate governance seems to be effectively summarised by the expression weak managers, strong blockholders and unprotected minority shareholders, paraphrasing M. Roe's (1994) sentence.