The Italian Chamber of Lords Sits on Listed Company Boards: An Empirical Analysis of Italian Listed Company Boards from 1998 to 2006

51 Pages Posted: 9 Nov 2007 Last revised: 11 Jun 2010

See all articles by Paolo Santella

Paolo Santella

Single Resolution Board

Carlo Drago

University of Rome "Niccolò Cusano"

Andrea Polo

Luiss Guido Carli University - Department of Economics and Finance; Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Einaudi Institute for Economics and Finance (EIEF); Barcelona Graduate School of Economics (Barcelona GSE); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Date Written: February 16, 2009

Abstract

The purpose of the present paper is to contribute to the literature on country interlocks by illustrating and analysing the interlocking directorships in the Italian listed companies from 1998 to 2006. We find that over the entire period a high percentage of the Italian listed companies are connected with each other through a very small minority of directors. Such group of interlocking (overwhelmingly male) directors shows a remarkable stability over time with very few entrants and very few exits mainly related to the passing away of the director. We define them for brevity the Lords of the Italian stockmarket. Lords tend to belong to families of directors, with the first five families having more than 100 directorships in nine years. The highest level of connectivity concerns those companies that belong to the MIB 30/S&P-MIB 40 index, the Italian Blue Chips. In particular, practically all the financial Blue Chips are connected with each other through a web of directors continuously from 1998 to 2006. The extent, depth, and stability of the connections among the Italian listed companies, and in particular the main Italian financial companies, raise doubts on the extent of their competitive behaviour.

Keywords: corporate governance, interlocking directorships, board turnover, antitrust, competition, social network analysis (SNA), exploratory data analysis (EDA), empirical corporate finance

JEL Classification: C0, L1, L4, G3, M2

Suggested Citation

Santella, Paolo and Drago, Carlo and Polo, Andrea, The Italian Chamber of Lords Sits on Listed Company Boards: An Empirical Analysis of Italian Listed Company Boards from 1998 to 2006 (February 16, 2009). Available at SSRN: https://ssrn.com/abstract=1027947 or http://dx.doi.org/10.2139/ssrn.1027947

Paolo Santella (Contact Author)

Single Resolution Board

Rue de la Science 27
Bruxelles, 1000
Belgium

Carlo Drago

University of Rome "Niccolò Cusano" ( email )

Via Don Carlo Gnocchi, 3
Rome, 00166
Italy

Andrea Polo

Luiss Guido Carli University - Department of Economics and Finance ( email )

Via Kennedy 6
Parma, 43100 - I
Italy

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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