Corporate Governance and Performance: an empirical analysis of a Sector Listed in Italian stock Exchange

Abstract

Studies on corporate governance have undergone rapid development since the last decades of the twentieth century, when both entrepreneurs and company men began to pay considerable attention to the subject. However, the actual debate began in the early nineties when, following the numerous financial scandals, companies were forced to better define the control mechanisms within them. Most reported cases of corporate failure are attributed to corporate governance practices (Appiah, 2013). We have begun to assist on a global scale, the important role attributed to the mechanisms of Corporate Governance as their correct application is closely related to company performance (Donaldson, 2003). On the basis of these considerations, the idea of the present work arises which, through a quantitative approach, investigates how the different composition and structure of the board influences the performance of the companies. The companies being analyzed are the mechanical companies listed on the Milan stock exchange for the three-year period 2015-2016-2017. We chose to analyze the mechanical companies thanks to the role they play in our country, in terms of employment, in terms of international trade and above all with reference to the strategic role they fulfill, strongly contributing to the development of the country and to the preservation of the levels of competition from the entire industrial sector. In the elaboration of the dataset, with regard to the governance data, the analysis of the corporate governance relations published annually by each company was used. To relate the governance variables to company performance we used a single financial statement indicator: the ROE (accounting measure), the most popular financial measure was used. I risultati del presente lavoro dimostrano che la dimensione del Consiglio di amministrazione ha un‟influenza positiva sulla redditività delle società ed anche la maggiore presenza di donne all‟interno del CdA. This study intends to examine how board diversity in companies operating in engineering, impact on performance. After a brief introduction to Corporate governance and firm performance, the work shows an adequate review of the most significant national and international literature on the subject. The research method used to analyze the topic is empirical using governance variable from corporate governance reports. This work tries to study deeply the impact of board diversity on firm performance by some listed company.