The main research field is Corporate Governance, especially as far
as the evolution of ownership structures, compliance to internal
dealing codes, value of voting rights, and minority shareholders'
expropriations. Related to this last issue, one of the last
research has addressed dual class unifications and shareholders'
expropriations.
Extant
literature has usually argued that firms that unify dual class
shares are likely to increase shareholder value. We examine the universe of
Italian dual class unifications over the 1974-2005 period and show
that the unification process is considerably more complex than
described in prior literature. In over half the universe,
Italian voting shareholders are not compensated for allowing their
voting rights to be diluted, and, not surprisingly, experience a
price decline at the announcement of unifications. While non-voting shares
appreciate in value at the announcement there is little evidence
that the unification increases total firm value. We argue that share
unifications are designed to benefit the controlling shareholders
and, in several cases, controlling voting shareholders use the
unification to expropriate wealth from minority
shareholders.
We investigates the determinants of regulatory
compliance in corporate organizations. Exploiting a unique
enforcement and reporting framework for insider trading in Italy,
we present three main findings. First, board governance, such as
chief executive-chairman duality and the proportion of
non-executive directors, does not increase the propensity of firms
to comply with regulation. Second, family firms and firms with a
high degree of separation of ownership from control are most likely
to comply with regulation. Third, corporate ethos is more important
in predicting regulatory compliance than explicit corporate
governance structures.
