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Ownership or Performance: What Determines Board of Directors' Turnover in Italy?

Author

Listed:
  • Giorgio Brunello

    (Department of Economics, University of Padua, Padua, Italy, and Research Associate, CEPR, London.)

  • Clara Graziano

    (Department of Economics, University of Udine, Udine, Italy)

  • Bruno Parigi

    (Department of Economics, University of Padua, Padua, Italy)

Abstract

This paper analyses the turnover of board of directors members on a sample of companies listed on the Milan Stock Exchange in the period 1988-1996. Our aim is to investigate if board members change more frequently when company performance is poor, as the literature suggests, if this relationship is similar for C.E.O.s and other board members, and if and how the ownership structure of Italian companies affects these relationships. We use three different measures of board of directors turnovers: turnover A is the turnover of all board members; turnover B is the turnover of the President, Vice-President, C.E.O. and General Manager; finally turnover C is the turnover of C.E.O.s only. We find that changes in ownership affect turnover and that the relationship between turnover and performance is stronger in companies that have experienced a change in the controlling shareholder.

Suggested Citation

  • Giorgio Brunello & Clara Graziano & Bruno Parigi, 1999. "Ownership or Performance: What Determines Board of Directors' Turnover in Italy?," Working Papers 1999.30, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:1999.30
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    References listed on IDEAS

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    Cited by:

    1. Bellavite Pellegrini, Carlo & Pellegrini, Laura & Sironi, Emiliano, 2013. "Costo degli organi societari e scelta dei sistemi di governance alternativi: l’evidenza empirica in Italia [Cost of corporate bodies and choice of alternative governance systems: empirical evidence," MPRA Paper 104657, University Library of Munich, Germany, revised 2013.
    2. Fertig, Michael & Schmidt, Christoph M., 2000. "Discretionary Measures of Active Labor Market Policy: The German Employment Promotion Reform in Perspective," IZA Discussion Papers 182, Institute of Labor Economics (IZA).
    3. Giacomo Cau & Massimiliano Stacchini, 2010. "The certification role of bank directors on;corporate boards," Mo.Fi.R. Working Papers 46, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Ricardo N. Bebczuk & André L. Carvalhal da Silva & Alberto E. Chong & Juan José Cruces & Urbi Garay & Maximiliano González & Luis H. Gutiérrez & Enrique Kawamura & Ricardo P. C. Leal & Fernando Lefort, 2007. "Investor Protection and Corporate Governance: Firm-level Evidence across Latin America," IDB Publications (Books), Inter-American Development Bank, number 59598 edited by Alberto E. Chong & Florencio López-de-Silanes, February.
    5. repec:idb:brikps:354 is not listed on IDEAS
    6. Bebczuk, Ricardo N. & Da Silva, André L. Carvalhal & Chong, Alberto E. & Cruces, Juan José & Garay, Urbi & González, Maximiliano & Gutiérrez, Luis H. & Kawamura, Enrique & Leal, Ricardo P. C. & Lefort, 2007. "Investor Protection and Corporate Governance: Firm-level Evidence across Latin America," IDB Publications (Books), Inter-American Development Bank, number 354, November.
    7. Franco A. Grassini, 2001. "La gouvernance des entreprises en Italie: un exemple de non-convergence?," Revue Finance Contrôle Stratégie, revues.org, vol. 4(3), pages 147-182, September.
    8. Carbonai, Davide & Di Bartolomeo, Giovanni, 2006. "Interlocking directorates as a thrust substitute: The case of the Italian non-life insurance industry," MPRA Paper 4420, University Library of Munich, Germany.
    9. Sabrina Pisano & Luigi Lepore & Rocco Agrifoglio, 2015. "Corporate governance and information asymmetry between shareholders and lenders: an analysis of Italian listed companies," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2015(2), pages 27-53.
    10. Brunello, Giorgio & Graziano, Clara & Parigi, Bruno, 2001. "Executive compensation and firm performance in Italy," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 133-161, January.
    11. Tor Eriksson & Erik Strøjer Madsen & Mogens Dilling-Hansen & Valdemar Smith, 2001. "Determinants of CEO and Board Turnover," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 28(3), pages 243-257, September.
    12. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute of Labor Economics (IZA).
    13. Alberto Chong & Florencio López-de-Silanes, 2007. "Investor Protection and Corporate Governance : Firm-Level Evidence Across Latin America," World Bank Publications - Books, The World Bank Group, number 6769.
    14. Portolano, Alessandro, 2000. "The decision to adopt defensive tactics in Italy," International Review of Law and Economics, Elsevier, vol. 20(4), pages 425-452, December.

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    More about this item

    Keywords

    Board of Directors; Corporate governance; Financial agency;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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