Marcello Bianchi, Angela Ciavarella, Luca Enriques, Valerio Novembre, Rossella Signoretti Regulation and self-regulation of related party transactions in Italy: An empirical analysis (01 Mar 2014) Available at ECGI: http://ecgi.global/working-paper/regulation-and-self-regulation-related-party-transactions-italy-empirical-analysis
This paper assesses how Italian companies have implemented the regulation on related party transactions enacted by Consob in 2010. Companies have been given some degree of freedom in devising their internal codes: they may ?opt-up? or ?opt-down? from some of the default provisions set forth in the regulation, thus tailoring internal codes to their own individual needs.
We investigate how firms have made use of these options, building an ad hoc firm-specific indicator which focuses on five key provisions. We find that the options we focus on have been taken advantage of in a variety of ways. We also verify the hypothesis that firms adopt stricter/looser procedures depending on corporate governance characteristics. While non-controlled firms seem to have set up stricter procedures, among controlled-companies those where a single shareholder or a coalition holds a stake lower than 50% of voting and cash flow rights have weaker procedures. Finally, while a higher presence of independent directors does not seem to play a role, the presence of a director nominated by institutional investors is positively correlated with stricter procedures.
This essay, prepared for a volume on related-party transactions (RPTs), explores the economic, legal and policy challenges associated with RPTs in state-owned enterprises (SOEs). We show that RPTs in SOEs differ from RPTs in privately owned...Read more
Majority of Minority (MOM) approval is a common mechanism used in many jurisdictions to control conflicts of interest in related party transactions. Recently, in M & F Worldwide, the Delaware Supreme Court held that MOM approval in a...Read more
This paper analyses the regulation of related party transactions in the UK through two comparative lenses, one external, the other internal. The external comparison is between English law and the law on RPTs in the United States, especially in...Read more
Germany Inc. was an idiosyncratic form of industrial organization that put financial institutions at the center. This paper argues that the consumption of private benefits in related party transactions by these key agents can be understood as a...Read more