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governance source

corporate governance source comes from the “Corporate Governance Code” (Codice
di Autodisciplina), published by the Corporate Governance Committee. The
Committee has been established due to the initiative of Borsa Italiana SPA, and
it is composed by the President of Borsa Italiana SPA itself, investors and
some representatives of banks and companies. The purpose of the Code is to make
a comparison between Italy and the most powerful financial countries, trying to
harmonize their differences. Unfortunately, even if there is a strong need for
the application of what is stated in the Code, it was decided that it should
not be binding for the Italian companies. This means that the way of
self-determination by the issuers prevailed.

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personal interpretation of this problematic could be the fact that the Italian
scenario is plenty of medium and small enterprises, which mostly have got a
family-model governance and management. This makes us think about the huge
difference between listed companies and not listed one. For these last ones,
implementing the specific requirements of the Code would be too costly and
would hinder their profitability. In any case, any company that chooses to
adhere to the Code is required to provide information on corporate governance
and ownership structures. This information must be accurate and easy to
understand. Above all, the recommendations contained in the principles and
criteria must be correctly applied.


given the very flexible Code setting, issuers may not apply, some of its
recommendations. This is done by virtue of the comply or explain mechanism
provided for by art. 123-bis of T.u.f. Obviously the company needs to explain
why the principle has not been applied. For example, the enterprise may not yet
be sufficiently structured to apply all recommendations or may consider some
recommendations not compatible with its governance model or with its own legal
and financial situation.

of the board

board of directors consists of executive and non-executive directors. The
executive directors are qualified like that in the following cases:

When they are managing directors of
the company or of a subsidiary company;

When they are directors who hold
management positions in the company or in a subsidiary;

The directors who are part of the
executive committee of the company.


directors are instead not qualified as independent in the following cases:

Whether he directly or indirectly
controls the company or is able to exercise significant influence over it;

if he is, or has been in the previous
three financial years, a significant exponent of the issuer, or of one of its

Whether, directly or indirectly, he
has, or has had in the previous financial year, a significant commercial,
financial or professional relationship with the enterprise subsidiary or with
a party that has a huge influence on the issuer;

If he receives, or has received in
the previous three financial years, a significant additional remuneration from
the issuer or a subsidiary or parent company;

If he has been a director of the
company for more than nine years in the last twelve years;

If he is a close family member of a
person who is in one of the situations referred to in the previous points.


number and responsibilities of independent directors are adequate in relation
to the size of the board and the activity carried out by the issuer; they are
also such as to allow the establishment of committees within the board,
according to the indications contained in the Code. In any case, independent
directors are not less than two. The independent directors meet at least once a
year in the absence of the other directors. The board of directors can also set
up a nominations committee, composed of a majority of independent directors. Moreover,
in the Code it has well being specified that the assignment of vicarious powers
for cases of urgency to directors who do not have managerial powers does not
constitute them as executive directors, except that these powers are used with
considerable frequency.


the board of directors can appoint an independent director as “lead independent
director “, if this is required by the majority of the independent directors,
unless the board is otherwise motivated. The lead independent director represents
a point of reference and coordination of the contributions of non-executive
directors. The lead independent director is also entitled to convene,
independently or at the request of other directors, specific meetings of
independent directors only for the discussion of issues deemed of interest with
respect to the functioning of the board of directors or to social management.
Furthermore, he collaborates with the chairman of the board of directors in
order to ensure that the directors are recipients of complete and timely
information. It is very important to point out that the chief executive officer
of a company (A) does not assume the office of director of another enterprise
(B) not belonging to the same group, of which a director of the issuer is a chief
executive officer (A).

general, it is advisable to avoid the concentration of charges in one person.
In particular, the separation of the roles of president and chief executive
officer is recommended. As for the latter, he is the main person responsible
for managing the company (CEO). The Committee believes that the separation of
the roles may reinforce the characteristics of impartiality required by the
chairman of the board of directors.


Analyzing the Italian condition empirically, we
can see that 84% of Italian listed companies are controlled by one or more
shareholders. In particular, out of 234 companies, 115 are controlled by right,
that is, with a share exceeding half of ordinary capital. Although the
traditional characteristics of high proprietary concentration are confirmed,
these data attest to the continuation of certain trends that have emerged in
recent years. First of all, the number and weight on the capitalization of the
subsidiaries continues to decrease. The presence of Italian institutional
investors in listed companies also decreased, especially the reduction in the
number of Italian banks and insurance companies.

As regards the profile of the directors, the average
age of the directors is 56 years old, foreigners account for 7% of the total
and represent 16% of the board. With regard to the level of education, about
86% of the directors graduated. Board diversity profiles seem to be associated
with the sector of belonging and size of the company. In particular, in service
companies, the presence of younger and foreign administrators is more frequent
than in the industrial and financial sector.

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