CORPORATE GOVERNANCE INDEXES: A PRACTICAL APPLICATION ON ITALIAN SME’S

In the economic literature, a group of studies investigated the impact that good corporate governance may have on corporate financial performance. Despite the difficulties underlying the creation of a bridge between the two terms, some authors were able to identify an evident relationship, finding depending and independent components. One of the main problems they dealt with was the definition of corporate governance itself and its practical measure in the variety of businesses (industry/dimension/geographic area/regulation, familynon family owned, etc.) Although both academics and practitioners have proposed a set of parameters and indices to assess “good corporate governance”, difficulties arise when companies are not listed and are just small or medium enterprises. Corporate governance practices are limited, often firm specific and general prescriptions and measures for corporate governance must consequentially be adapted to the smaller dimension. This study focuses on SMEs operating in northeast Italy. Following a review of the literature, a set of variables for measuring the “level” of corporate governance in that specific context is defined. A questionnaire with a set of variables was sent to SMEs in the Veneto region and more than 200 of them replied. After a descriptive analysis of responses, factor and cluster analyses were conducted in order to classify and aggregate the companies. In the sample considered, companies revealed that they pay attention to corporate governance matters and tend to polarize to 3 main clusters at the top and in the low-middle of the scale.