Corporate Governance in Italian Listed Companies

D’Onza, Giuseppe; Greco, Giulio; Ferramosca, Silvia

doi:10.1007/978-3-642-45167-6_5

Cited by 13 publications

(13 citation statements)

References 39 publications

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“…This research contributes to the understanding of the Italian corporate governance where agency theory assumptions need to be "relaxed" and adapted to this interesting context. Particularly, this paper contributes to the literature on agency theory and listed companies (Di Pietra et al, 2008;D'Onza et al, 2014) by reconciling some of the conflicting results and explaining some new Italian corporate governance insights. Our findings also help to cast light on some of the conflicting results in prior research (Melis, 2000;Allegrini and Greco, 2013) inherent in the board structure-performance relationship.…”

Section: Discussionmentioning

confidence: 88%

“…Given the concerns about Italian ownership composition (Melis, 2000;D'Onza et al, 2014), we run models (1)-( 5) a second time, where the main dependent and independent variables remain unchanged and where the ownership concentrationwhich is a control variableis substituted with the ownership composition (institutional investors, board ownership, management, government, own shares, bank), CEO_shareholder dummy and shareholder agreements, as part of the control variables. By doing that, we develop models ( 6), ( 7), ( 8) and ( 9).…”

Section: Models and Methodologymentioning

confidence: 99%

“…As result, the Italian listed companies face not only the principal-agent issue (Fama andJensen, 1983a, 1983b) but also the principal-principal problem (Melis, 2000), i.e. conflicts between blockholders and minority shareholders (D'Onza et al, 2014…”

Section: The Italian Contextmentioning

confidence: 99%

“…Additionally, prior research on the performance of Italian companies (Melis, 2000;D'Onza, Greco and Ferramosca, 2014;Allegrini and Greco, 2013;Zona, 2014) has identified some conflicting results regarding the impact on firm performance of a range of board characteristics, including the board structure, the role of independent directors, the CEO leadership and ownership concentration,. For instance, Di Pietra et al (2008) found no relationship between the board size and performance, whereas Romano and Guerrini (2014) found a positive relationship, especially in the water utility sector.…”

Section: Introductionmentioning

confidence: 99%

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The board of directors and firm performance: empirical evidence from listed companies

2019

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Purpose This study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice. Design/methodology/approach This research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership. Findings While directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance. Research limitations/implications This paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance. Practical implications This paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company. Originality/value The results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

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Section: Discussionmentioning

confidence: 88%

Section: Models and Methodologymentioning

confidence: 99%

Section: The Italian Contextmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The board of directors and firm performance: empirical evidence from listed companies

2019

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“…However, in the studies on voluntary disclosure, the agency theory is used to analyse the disclosure of information from managers to shareholders (de Klerk et al, 2015; de Villiers & Marques, 2016; de Villiers & van Staden, 2011). The peculiarities of Italian setting weaken the role of the agency theory for the analysis of disclosure practices, as the traditional managers versus shareholders agency problem could at most refer to the large versus minority shareholders (D'Onza, Greco, & Ferramosca, 2014).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Does the EU Directive on non‐financial information influence the value relevance of ESG disclosure? Italian evidence

2020

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The implementation of the EU Directive on non-financial information determines the transition from a voluntary to a mandatory disclosure setting. This paper is a first attempt to investigate if this transition influences the value relevance of non-financial information, which relates to the environmental, social and governance disclosure (ESG) requirements of the Directive. Italy provides an interesting setting as non-financial information was generally voluntary before the Directive, which was implemented with the Italian Legislative Decree 254/2016. To this extent, we examine the non-financial, environmental and social disclosure practices of 231 Italian listed firms in the pre-(2016) and post-(2017) Legislative Decree application. Our results do not show any relevant increase of such disclosures after the Legislative Decree application, as Italian listed firms limit such disclosure to a minimum requirement. Further, this finding is confirmed also for those firms voluntarily providing a non-financial report (sustainability or integrated report) before the Legislative Decree application. Our regression analysis shows that accounting numbers are associated with share prices, while non-financial, environmental and social information are not value-relevant with reference to the pre-and post-Legislative Decree application. This means that the non-financial, environmental and social information beyond the financial accounting information do not explain any incremental value-relevant information to investors in the non-financial mandatory disclosure setting required by the new regulation. Our results enrich previous evidence concerning the value relevance of non-financial and ESG disclosure mainly focused on Anglo-Saxon contexts.

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Ownership concentration and board structure: Alignment and entrenchment effects in an emerging market

Lizares

2022

Manage Decis Econ

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This paper explores if controlling shareholders' influence on the board structure allows entrenchment or alignment effects to prevail. Informed primarily by the principal–principal theory and supported by the stewardship and resource dependence theories, this study samples 235 publicly listed Philippine firms from 2015 to 2019 and employs instrumental variable fixed effect panel and probit regression analyses. Results show ownership concentration is positively associated with the proportion of nonindependent, nonexecutive directors on the board and the likelihood of CEO duality, indicating that boards are not completely independent and are likely to generate entrenchment effects.

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Corporate Governance in Italian Listed Companies

Cited by 13 publications

References 39 publications

The board of directors and firm performance: empirical evidence from listed companies

The board of directors and firm performance: empirical evidence from listed companies

Does the EU Directive on non‐financial information influence the value relevance of ESG disclosure? Italian evidence

Ownership concentration and board structure: Alignment and entrenchment effects in an emerging market

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