Corporate governance and control in Italian Family Business: an empirical analysis

In recent decades the importance of the role played by corporate governance has emerged. The control exercised by the various corporate bodies, therefore, has assumed considerable importance, especially after the various financial scandals. In this article we are going to analyze how the control is exercised within a particular type of enterprise: family firms, which, because of the composition of the capital, have particular characteristics. We examined family businesses because, even if they are present all over the world, they are the most common form in Italian businesses; in our country, in fact, the percentage of family businesses represents even 85%. The literature (Cafferata, 1988, 1995, Montemerlo, 2000, and Gubitta Gianecchini, 2002) shows that both in large family businesses, where there is a structured presence of managers, and in small family businesses, which the entrepreneur is the one and only manager, control is exercised by the family. In this context, the Board of Directors plays a vital role. In a situation of growing separation between ownership and management, the Board is the body responsible for settling shareholder expectations in the first place and then to all stakeholders. From the above it is clear that in family-controlled firms the governance and control are influenced by the structure of the company and the family dynamics. The presence of an entity such as the board of directors more independent and consists of several committees is the best solution to ensure business continuity. Furthermore we will analyze all further organs that a family business uses to comply fully control. In order to prove as above, the study will continue with an empirical analysis where we will analyze the different role of boards of directors in Italian family businesses, dividing the sample in small - medium companies and large listed companies. The analysis will be qualitative and will involve interviews and main corporate governance documents. Main goal of our work is to compare the results of our analysis with the discussion in the literature, going to highlight, first of all, the different roles of the board of directors in the companies analyzed to delineate the prototype of the member of the board and the various tasks and goals of the Board in two types of business analyzed and then the presence of other control bodies that could ensure the best management and administration of the company.