The participants at this National Roundtable noted that, in recent years, the corporate governance of Italian firms has changed in a rapid and decisive – though in some ways haphazard – manner. This process, which started in the 1990s, particularly in the wake of the wave of privatizations, was intended to make the financial market more attractive to foreign and Italian investors by providing greater guarantees for the protection of minority shareholders. In reality, it transplanted into the Italian system, in an incoherent manner, various elements borrowed from Anglo-Saxon contexts that differ significantly from that of Italy in terms of their economic structures and legal systems. Subsequent legislative reforms, at times carried under the steam of incorporating European directives within national law or as a result of collapses in investor confidence following national and international financial scandals, have eventually led to further regulatory changes and “implants” that have often been adopted in disregard for the overall architecture of the regulatory framework.
The result today of this regulatory stratification is an Italian system of corporate governance that is in many ways cumbersome and overblown. By way of example, the participants cited the internal controls and market disclosure required of listed companies, in respect of which the relevant Italian legislation is excessively complex and onerous, to the point of discouraging many firms that would otherwise meet the requirements for going public from doing so. It was thus felt that urgent efforts are needed to improve the regulatory framework by taking steps to streamline and rationalize the existing legislation, so as to alleviate management and organizational costs for businesses whilst at the same time guaranteeing adequate protection for individual and institutional investors.
It was stressed, however, that such efforts should not fail to capitalize on the lessons learned both by major Italian corporate groups that compete successfully on a global scale as well as those lessons that have emerged from international best practice. Other areas pointed to as requiring further consideration included, among others, the role and functioning of the Board of Directors as a forum for strategic orientation rather than control. In this regard, the composition of the Board, its committee structure, the management of key appointment processes, and the formulation of remuneration and succession arrangements for management were seen as playing a particularly significant role. Even with respect to shareholder relations, there was a perceived need for special attention to be paid to the protection of minority stakeholders and the promotion of their participation in shareholder decision-making processes.
Finally, it was felt that it would be misleading to focus on the legal aspects of the matter whilst overlooking those of an economic nature, especially in the case of Italy, where the prevalence of smaller businesses, which are almost always tightly family-run, makes certain advanced corporate governance tools inappropriate in any case. To this end, it was suggested that policy efforts should be aimed at identifying a range of models and tools which respond in a pragmatic, innovative and efficient way to the needs of Italian firms, always bearing in mind that, in a global scenario, both the competitiveness of the Italian financial system and that of Italian businesses rests on there being a robust and flexible system of corporate governance in place.