Corporate governance and performance: An analysis of Italian listed companies

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Abstract

In recent years, both corporate governance and performance management have been subjected to considerable changes. In this dynamic context, it is interesting to study the evolution of the relationship between performance and governance. Does governance still affect performance? The purpose of this paper is to verify the presence and intensity (extent) of the relationship between corporate governance and performance in Italian listed companies by using both accounting and non-accounting performance measures. The purpose of this paper is to investigate the effects of prior firm performance on board composition and governance structure of some companies listed on the Italian stock exchange, analysing how a governance approach influences the performance of sample companies. For the research the methodology used is quantitative and we used regression analysis on a sample of 23 Italian listed companies: mechanical companies and public utilities to find that the company’s performance was positively related to the size of the board. The empirical analysis conducted allowed us to verify the hypothesis according to which the increase in Corporate Governance Best Practices influences company performance. However, the results we have received do not allow us to arrive at completely unequivocal interpretations. The results showed we have received do not allow us to arrive at completely unequivocal interpretations; the main limit is the sample size used in this study was relatively small.

Keywords: Corporate Governance, Firm Performance, Board of Directors, Public Utilities

Authors’ individual contributions: Conceptualization – F.E.R., G.B., G.S., M.B., and M.R.; Methodology – F.E.R., G.B., G.S., M.B., and M.R.; Writing – F.E.R., G.B., G.S., M.B., and M.R.

JEL Classification: M10, M20, M40, M42

Received: 04.12.2019
Accepted: 30.01.2020
Published online: 04.02.2020

How to cite this paper: Rubino, F. E., Bronzetti, G., Sicoli, G., Baldini, M., & Rija, M. (2020). Corporate governance and performance: An analysis of Italian listed companies. Corporate Board: Role, Duties and Composition, 16(1), 8-18. https://doi.org/10.22495/cbv16i1art1