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Corporate Governance Failures: to what extent is Parmalat a particularly Italian Case?

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  • Andrea Melis

Abstract

The paper discusses to what extent Parmalat's failure can be considered a particularly Italian case. The main characteristics of Parmalat's corporate governance structure are compared and contrasted with those prevailing among Italian listed companies as well as with the highest corporate governance standards in Italy. Empirical evidence seems to confirm the lack of a monitoring structure in making corporate insiders accountable in the presence of a corporate governance system characterised by a controlling shareholder. The role of the ownership and control structure (with special regard to the controlling shareholder's role) and of the board of statutory auditors have Italian traits and might suggest that the Parmalat case is a particularly Italian scandal. However, Italian corporate governance standards were not completely at fault in the Parmalat case. Parmalat's corporate governance structure failed to comply with some of the key existing Italian corporate governance standards of best practice, such as the presence of independent directors and the composition of the internal control committee. Besides, the role of the external auditor as well as the internal control committee as non‐effective monitors seem to put Parmalat into the global argument case, not very different, mutatis mutandis, from other corporate scandals.

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  • Andrea Melis, 2005. "Corporate Governance Failures: to what extent is Parmalat a particularly Italian Case?," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(4), pages 478-488, July.
    • Handle: RePEc:bla:corgov:v:13:y:2005:i:4:p:478-488
    DOI: 10.1111/j.1467-8683.2004.00443.x
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    1. Andrea Melis, 2000. "Corporate Governance in Italy," Corporate Governance: An International Review, Wiley Blackwell, vol. 8(4), pages 347-355, October.
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    4. Bava Fabrizio & Gromis di Trana Melchiorre, 2016. "Disclosure on Related Party Transactions: Evidence from Italian Listed Companies," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 6(2), pages 119-150, July.
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    10. Joseph F. Brazel & Lorenzo Lucianetti & Tammie J. Schaefer, 2021. "Reporting Concerns About Earnings Quality: An Examination of Corporate Managers," Journal of Business Ethics, Springer, vol. 171(3), pages 435-457, July.
    11. Harold Hassink & Roger Meuwissen & Laury Bollen, 2010. "Fraud detection, redress and reporting by auditors," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(9), pages 861-881, October.
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    13. Florio, Cristina & Leoni, Giulia, 2017. "Enterprise risk management and firm performance: The Italian case," The British Accounting Review, Elsevier, vol. 49(1), pages 56-74.
    14. Domenico Campa & Ray Donnelly, 2016. "Non-audit services provided to audit clients, independence of mind and independence in appearance: latest evidence from large UK listed companies," Accounting and Business Research, Taylor & Francis Journals, vol. 46(4), pages 422-449, June.
    15. Mallin, Chris & Melis, Andrea & Gaia, Silvia, 2015. "The remuneration of independent directors in the UK and Italy: An empirical analysis based on agency theory," International Business Review, Elsevier, vol. 24(2), pages 175-186.
    16. Lucie Courteau & Roberto Di Pietra & Paolo Giudici & Andrea Melis, 2017. "The role and effect of controlling shareholders in corporate governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 561-572, September.
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    18. Ali Uyar & Simone Pizzi & Fabio Caputo & Cemil Kuzey & Abdullah S. Karaman, 2022. "Do shareholders reward or punish risky firms due to CSR reporting and assurance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1596-1620, July.
    19. Roberto Maglio & Andrea Rey & Francesco Agliata & Rosa Lombardi, 2020. "Exploring sustainable governance: Compliance with the Italian related party transactions regulation for the legal protection of minority shareholders," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 272-282, January.
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