The 2015 Edition of Corporate Governance Principles issued by OECD: impact and compliance for the corporate governane of Italian Veneto SMEs.

PROF. ROFFIA PAOLO Associate Professor Department of Business Administration UNIVERSITY OF VERONA Via Cantarane, 24 37129 Verona ITALY Email: paolo.roffia@univr.it Office: +39 045 8028012 Abstract title: The 2015 edition of Corporate Governance Principles issued by OECD: impact and compliance for the corporate governance of Italian Veneto SMEs In September 2015 during the G20 Finance Ministers and Central Bank Governors Meeting, the OECD presented their updated G20/OECD “Principles of Corporate Governance.” The OECD CG Principles - endorsed by OECD Ministers since 1999 - are an international benchmark for policy makers, investors, corporations and other stakeholders and are one of the standards designated by the Financial Stability Forum for a “sound financial system”. The importance of “good” corporate governance, for the competitiveness of the companies and for a healthy economic system, is more and more evident, for regulators and for a wide group of stakeholders. Nowadays most of the big corporations and multinational enterprises spend a lot of energy and resources in designing and controlling their corporate governance, setting roles and activities of the Board of Directors (BoD), specifying the conditions for being a member of the BoD and their remuneration - examples of topics covered by the six chapters of the OECD CG Principles. But what happens in SMEs, often family owned, where BoD meetings are rare, a conflict of interest of board members is possible and resources to be dedicated to a “good” corporate governance are limited? The purpose of this research project was to investigate compliance to the CG Principles issued by OECD by a specific category of companies: the small and medium enterprises. SMEs make up more than 90% of the companies operating in Italy, half a million in the Veneto region. Their role in the Italian economy is fundamental, despite their limited size and the few resources to be employed in CG matters. This research project used an empirical approach, analysing a few selected companies from the Veneto region. A specific questionnaire was sent to 50 companies based in the Verona and Vicenza provinces, to monitor 17 variables related to the OECG CG principles in the SME context. Data were collected for limited liability companies, with from 10 to 249 employees, operating in the macro sectors of manufacturing (C), building (F) and grocery and distribution (G). We found that most of the companies, thanks to the Italian regulatory framework, adopted a good corporate governance design and control, substantially in line with the OECG CG Principles. The responsibility of the BoD and the level of transparency applied were evident. Can we extend these results to a wider context?