determinants of corporate governance in the italian financial.pdf

CE: ANP CSE: AR ECNO 155 Economic Notes by Banca Monte dei Paschi di Siena SpA, vol. 34, no. 3-2005, pp. 371–405 371 Determinants of Corporate Governance in the Italian Financial Market F EMILIO BARUCCI* – JURY FALINI† O We evaluate the determinants of corporate governance of companies O listed at the Italian Stock Exchange. We consider ownership structure, balance sheet data, company performance and some qualitative features R as determinants. We evaluate the convergence of Italian companies’ governance towards a system with effective governance mechanisms. P Our analysis shows definitely that companies with a large shareholder and/or minority blockholders controlling a large stake and companies belonging to a pyramidal group or controlled by a shareholders’ coali- tion are characterized by a poor governance/shareholders’ protection D standard. Institutional investors play a positive role. E (J.E.L.: G30, G34, G38). T 1. Introduction C This paper aims to evaluate the corporate governance of companies E listed at the Italian Stock Exchange. For each company, we consider two main sources of information: (i) the 2002 and the 2003 by-laws, (ii) the R 2002 and the 2003 statements on compliance with the code of best practice introduced in 1999 by t