Manuscript Type: EmpiricalResearch Question/Issue: This paper sets out to shed light on female representation on Italian corporate boards before the introduction of gender quota legislation in 2012, as well as on the relevance of family connections. We investigate the potential determinants of having boards with diverse representation and the correlation between female directorship and family connections, with a focus on governance measures. Research Findings: Using data on all directors of Italian publicly traded companies from 2008 to 2010, we identify two different models. In the majority of gender-diverse boards, at least one woman has a family connection to the controlling shareholder. Family-affiliated women are more common in companies that are small, have a concentrated ownership, are in the consumer sector, and have a larger board. Conversely, non-family-affiliated women are more common on the boards of companies that are widely held, have younger and more educated boards, have a higher proportion of independent directors, and have a smaller number of interlocked directors. With reference to governance-related outcomes, the number of board meetings appears to be negatively correlated to both the presence of family members and female directors. Additionally, women show lower attendance than men at board meetings. Theoretical/Academic Implications: The paper provides support for theories on the differences between the governance of family-owned and non-family-owned companies. Practitioner/Policy Implication: The study offers insights to policymakers implementing gender quota legislation. Substantial effort should be devoted to ensuring that board diversity is associated with actual independence of board members.
Nearly 86% of listed Italian companies now claim to be in formal compliance with the provisions of the Italian Corporate Governance Code, which, like many codes in EU countries, give companies the option to either comply or explain their decision not to do so. But in the wake of the recent financial crisis, the effectiveness of such self‐regulatory corporate governance codes has been subjected to increasing skepticism. In particular, critics wonder whether such governance codes actually encourage the adoption of best practices and promote better governance.
This article presents a governance indicator (CoRe) devised by the authors that attempts to assess the actual, or effective, levels of compliance with the Italian Corporate Governance Code in terms of listed companies' procedures for dealing with related party transactions (RPTs). The authors report that the companies' level of effective compliance with regard to RPTs is considerably lower than their publicly reported levels of formal compliance. The authors also report that higher levels of effective compliance tend to be found in companies where (1) minority shareholders have appointed one or more directors; (2) independent directors serve on important committees; and (3) there are significant holdings by institutional investors—particularly foreign investors—who participate in general shareholder meetings.
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