The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of Corporate Law

47 Pages Posted: 20 Mar 2008 Last revised: 30 Apr 2009

See all articles by Federico Cesare Guido Ghezzi

Federico Cesare Guido Ghezzi

Bocconi University - Department of Law

Corrado Malberti

University of Trento - Faculty of Law

Abstract

This article explores the Italian reform of corporate law of 2003, which, for the first time, allowed corporations to choose among three different models of corporate governance. In addition to the traditional model, which has been significantly modernized by the reform, two other "alternative" systems of governance were introduced: the two-tier system, which owes its basic structure to the German tradition, and the one-tier system which derives from the Anglo-American tradition. Taking into account the initial goals of the Italian legislature in designing the reform, we describe how the alternative board structures have been implemented in Italian practice, and provide an overview of the initial predictions about their advantages and disadvantages. We argue that Italy has taken an innovative approach to corporate governance that may be useful for other European countries interested in granting corporations the power to choose between board structures. However, analyzing some empirical evidence on the first effects of the reform, we also recognize that, even if courageous, the reform so far was not particularly successful in attracting corporations to the new models.

Suggested Citation

Ghezzi, Federico Cesare Guido and Malberti, Corrado, The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of Corporate Law. European Company and Financial Law Review, Vol. 5, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1111528

Federico Cesare Guido Ghezzi (Contact Author)

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, Milan 20136
Italy

Corrado Malberti

University of Trento - Faculty of Law ( email )

Italy

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