Abstract
The Early Warning System is intended as an instrument aimed at driving the companies in the identification of the very first signs of crisis. Monitoring the occurring of the crisis is no longer a responsibility of the sole entrepreneur or of the board of directors but other legitimized subjects are identified. The IC-Code sets up new corporate governance rules for a huge number of Italian Family SMEs pretending the introduction of independent control bodies, Board of Statutory Auditors, and/or External Auditor. Some of the suggestions coming from the family business framework seems then to be enforced by law in the Italian context
Highlights
The Italian legislator with the Decree-Law No 155/2017, which in February 2019 has been converted into the new Insolvency and Crisis Code (IC-Code), has introduced a compulsory Early Warning System to detect occurring crisis
Such conflicts may be of several types: justice conflicts, role conflicts, work-family conflicts, identity conflicts, succession conflicts, arguments about power and control, role ambiguities, rivalries between brothers and sisters, conflicts between family members and employees caused by nepotism (Cosier & Harvey, 1998)
Studies that have shown that in family firms, the classic ownermanager conflict does not occur. This result may be explained by the role of the board in family firms as an agency cost control mechanism that acts as a substitute for other systems
Summary
The Italian legislator with the Decree-Law No 155/2017, which in February 2019 has been converted into the new Insolvency and Crisis Code (IC-Code), has introduced a compulsory Early Warning System to detect occurring crisis. (Agenzia delle Entrate), the national insurance institution and the tax collection agent Among these subjects it is undoubtedly the Board of Statutory Auditors to play the role of the main recipient of the signs of crisis as a body assigned to monitor and supervision to enforce compliance of management with statutes and by-laws. This is confirmed by the significant extension of the number of companies – Family SMEs - that will be obliged to change their habits converting their simple entrepreneurial governance by providing for at least some kind of control bodies to cope with the new Code. The paper considers some of the parliamentary hearings records to point out strengths and weaknesses of the legislator choices which may influence the enforcement and the success of the transition towards the SMEs new governance model
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