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The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of Corporate Law

The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of... Abstract This article explores the Italian reform of corporate law of 2003, which, for the first time, allowed corporations to choose among three different models of corporate governance. In addition to the traditional model, which has been significantly modernized by the reform, two other “alternative” systems of governance were introduced: the two-tier system, which owes its basic structure to the German tradition, and the one-tier system which derives from the Anglo-American tradition. Taking into account the initial goals of the Italian legislature in designing the reform, we describe how the alternative board structures have been implemented in Italian practice, and provide an overview of the initial predictions about their advantages and disadvantages. We argue that Italy has taken an innovative approach to corporate governance that may be useful for other European countries interested in granting corporations the power to choose between board structures. However, analyzing some empirical evidence on the first effects of the reform, we also recognize that, even if courageous, the reform so far was not particularly successful in attracting corporations to the new models. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Company and Financial Law Review de Gruyter

The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of Corporate Law

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References (1)

Publisher
de Gruyter
Copyright
Copyright © 2008 by the
ISSN
1613-2548
eISSN
1613-2556
DOI
10.1515/ecfr.5.1.1
Publisher site
See Article on Publisher Site

Abstract

Abstract This article explores the Italian reform of corporate law of 2003, which, for the first time, allowed corporations to choose among three different models of corporate governance. In addition to the traditional model, which has been significantly modernized by the reform, two other “alternative” systems of governance were introduced: the two-tier system, which owes its basic structure to the German tradition, and the one-tier system which derives from the Anglo-American tradition. Taking into account the initial goals of the Italian legislature in designing the reform, we describe how the alternative board structures have been implemented in Italian practice, and provide an overview of the initial predictions about their advantages and disadvantages. We argue that Italy has taken an innovative approach to corporate governance that may be useful for other European countries interested in granting corporations the power to choose between board structures. However, analyzing some empirical evidence on the first effects of the reform, we also recognize that, even if courageous, the reform so far was not particularly successful in attracting corporations to the new models.

Journal

European Company and Financial Law Review – de Gruyter

Published: Mar 1, 2008

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