Course Unit Page

Academic Year 2019/2020

Learning outcomes

The student will be able to understand  the main international models of corporate governance and their specific problems. He will also learn how minority shareholders' can be protected or expropriated. He will also understand some of the major EU directives which have increased harmonization of  European Financial markets.

Course contents

Program (and relative reading material)

1. Course introduction: International corporate governance models: Bank oriented (Japan, Germany, continental Europe) versus market oriented (US, UK). The anglosaxon model and the "public company". Agency costs from separation of ownership and control in a public company. External solutions: market for products, market for managers, market for corporate control. (Slides 1, REQ1, REQ2)

2. Agency costs from separation of ownership and control in a public company. Internal solutions: board of directors, debt, monitoring by institutional investors, incentive schemes. (Slides 2, REQ1, REQ2)

3. The US Enron scandal and the Sarbanes-Oxley Act (Slides 3, OPT1)

4. The Continental European Model: ownership-control separation through “legal devices". Major effects of Ownership/Control separation through legal devices. (Slides 4, OPT2)

5. Investors' protection around the world. The Law and Finance approach and its critics. Legal and non-legal tools for shareholder protection. (Slides 5, OPT-REQ1, OPT-REQ2, REQ3)

6. Corporate governance reforms and investors' protection in Italy. Self-expropriation in dual class-voting: a case study approach. (Slides 6, REQ4, REQ5)

7. The value of the voting right in dual class firms: theory and evidence (Slides 7, OPT-REQ3 )

8. The Financial Services Action Plan and major EU directives. Economics of Insider trading and the EU Market Abuse directive (Slides 8, OPT3)

9. Economics of Takeovers and the EU takeover directive (Slides 9, REQ6, OPT4).


Required reading material (REQ)

  • All Slides used in class (numbered according to the lectures' numbers)
  • REQ1: Denis D. K. and J.J. McConnell, 2003, “International corporate governance”, Journal of Financial and Quantitative Analysis, 38, 1-36.
  • REQ2: Schleifer and R. W. Vishny, 1997, “A Survey of Corporate Governance“, Journal of Finance 52, 737-783.
  • REQ3: Enriques L. and P. Volpin, 2007, “Corporate Governance Reforms in Continental Europe“, Journal of Economic Perspectives 21, 117-140.
  • REQ4: Barbi M., M. Bigelli, S. Mengoli, “Italian Corporate Governance”, in “The Handbook of International Corporate Governance: A Definitive Guide”, 2nd edition May 2009, The Institute of Directors, Kogan Page, London.
  • REQ5: M. Bigelli, S. Mengoli (2011), Self-expropriations versus self-interests in dual class voting”, Financial Management 40, 677-699
  • REQ6: Burkart M. and F. Panunzi, 2006, Takeovers, ECGI Working paper n. 118-2006.

Extra required reading material (OPT-REQ) for non-attending students taking the exam in the official exam sessions (i.e. in January-February and September) rather than at the end of the course 

  • OPT-REQ1: La porta et al. (1998), “Law and Finance”, Journal of Political Economy, 106, 1113-1155.
  • OPT-REQ2: Rajan R. G. and L. Zingales (2003), “The great reversals: the politics of financial developments in the twentieth century”, Journal of Financial Economics69, 5-50.
  • OPT-REQ3 Adams, R., and D. Ferreira, 2008, “One share, one vote: The empirical evidence”, Review of Finance, 12, 51-91.

Optional reading material (OPT) –Not required but helpful to expand some topics -

  • OPT1: Sarbanes-Oxley Act
  • OPT2: Bigelli M., V. Mehrotra and R. Rau, 2012, “Why are shareholders not paid to give up their voting privileges? Unique evidence from Italy”, Journal of Corporate Finance 17, 1619-1635.
  • OPT3: Enriques L. and M. Gatti (2006), EC Reforms of Corporate Governance and Capital Markets Law: Do they Tackle Insiders'Opportunism?, working paper.
  • OPT4: EU Takeover directive~

Teaching methods

Lectures on different topics with slides and some videos.

Assessment methods

The evaluation of attending students will we made by a final exam at the end of the course. The exam will be indicatively made of 20 multiple choices (20/30) and 5 short exercises of 2 point each for a total of 30/30 (plus 3 extra multiple choices for the laude in case of 30/30 on the previous exam part).

An exercise book can be found at the following URL:


Re-take exams will have a different format that is three open questions to be answered in a written form within one hours and for which students are invited to study also the extra material indicated as “OPT-REQ”.

Office hours

See the website of Marco Bigelli