Exploring sustainable governance: Compliance with the Italian related party transactions regulation for the legal protection of minority shareholders

Abstract

Regarding the development of sustainable governance systems, many regulators have issued and developed self-regulatory codes defining the characteristics and ideal features of government models. The adoption of codes of good governance could serve as a mechanism to increase the level of legal protection for minority shareholders.Thus, this paper aims to measure the effective compliance by Italian listed companies with the Italian Code's recommendations on related party transactions and to assess the level of legal protection for minority shareholders in the Italian stock market.Using a quantitative method, our findings suggest that FTSE MIB companies are effectively compliant and that public utilities companies are as well. We also carried out an ordinary least squares (OLS) regression and found that companies with a higher market value and a greater presence of independent and non-executive directors assure a higher level of compliance. We observed that widely held firms have a positive effect on the level of legal protection for the minority shareholders. Our paper contributes to enriching the sustainable governance models, and it is directed to academic and practical communities.

A sustainable governance model to prevent corporate corruption: Integrating anticorruption practices, corporate strategy and business processes

“…These factors are supposed to be the main pillars in implementing an integrated meta‐management framework for anticorruption. The factors are developed from the AST experience and are supported by the literature on the comprehensive anticorruption frameworks (Adeyeye, ; Luo, ; van Erp et al, ), meta‐management framework (Asif et al, , ; Stiles & Uhl, ), ESG integration frameworks (Asif et al, ; Baumgartner & Ebner, ; Eccles et al, ; Whitelock, ; Yu et al, ) and the sustainable governance concept (Aghion et al, ; Allais et al, ; Elkington, ; Lombardi et al, ; Lozano & Huisingh, ; Maglio et al, ; Sánchez et al, ; Schrippe & Duarte Ribeiro, ; Shahzad et al, ). These key success factors have been developed for each step in the Framework (Figure ).…”

“…Thus, international organisations and governmental bodies are promoting the concept of sustainable corporate governance (SCG), supporting companies in meeting their own expectations, integrating internal and external stakeholders into the decision‐making process, meeting social expectations through participatory democracy and undertaking the systematic adoption of intangible capital in both strategic and operational governance (Allais, Roucoules, & Reyes, ; Lombardi et al, ). The main peculiarity of SCG is an appropriate balance between managing organisations for shareholders and all stakeholders (Aghion, Caroli, & Garcia‐Penalosa, ; Allais et al, ; Elkington, ; Hart, ; Lombardi et al, ; Lozano, ; Lozano & Huisingh, ; Maglio et al, ; Schrippe & Duarte Ribeiro, ), safeguarding the environment and collectivity.…”

“…is attending the program I.Ph.D.@UNIPG. Penalosa, 1999;Allais et al, 2017;Elkington, 2002;Hart, 1997;Lombardi et al, 2019;Lozano, 2012;Lozano & Huisingh, 2011;Maglio et al, 2019;Schrippe & Duarte Ribeiro, 2019), safeguarding the environment and collectivity.…”

“…In response to the changing anticorruption context and the need to assure sustainable governance models and corporate social responsibility (Aghion et al, 1999;Allais et al, 2017;Elkington, 2002;Lombardi et al, 2019;Maglio et al, 2019;Schrippe & Duarte Ribeiro, 2019;Welford, 2007), the literature on anticorruption issues is becoming more related to firms' engagement (Rodriguez et al, 2006). However, researchers usually perceive anticorruption practices as independent from the company's system (control system/culture/ social responsibility).…”

Connecting earnings management and corporate social responsibility: A renewed perspective

“…Finally, Harjoto, Laksmana, & Lee () also found gender diversity to enhance CSR strengths, supporting the growing call for “greater board diversity from regulators in the US and European countries” (Harjoto,Laksmana, & Lee, , p. 657). Therefore, we assume that the presence of women on boards can be used as an instrument to measure CSP and to understand to what extent companies implement CSR activities in their sustainable governance and strategic endeavours (Kaymak & Bektas, ; Lombardi, Trequattrini, Cuozzo, & Cano‐Rubio, ; Maglio, Rey, Agliata, & Lombardi, ; Welford, ).…”