INVESTORS TRUST AFTER PARMALAT SCANDAL: THE ROLE OF CORPORATE GOVERNANCE

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Abstract

The collapse of the Parmalat food empire reveals a troubling aspect about Italian capitalism - the lack of effective financial control over its family-owned companies. But was Parmalat scandal a pure problem of corporate governance or was it simply a “fraud”? Bearle and Means (1932 pg. 6) famously explained: “The separation of ownership from control produces a condition where the interests of owner and of ultimate manager may, and often do, diverge ....”. Is this the case? Were the people who invested in bonds and shares of Parmalat savers, investors or what? Which was the role played in the story by Auditors, CONSOB and Bank of Italy? This paper analyses the current situation of the Italian corporate governance and saving system in a critical view trying to find an explanation to the previous questions.

Keywords: Investors Trust, Parmalat Scandal, Corporate Governance

How to cite this paper: D’Orio, G. (2004). Investors trust after parmalat scandal: The role of corporate governance. Corporate Ownership & Control, 2(2), 102-107. https://doi.org/10.22495/cocv2i2p9