Abstract

The economic challenges of recent years have been accompanied by numerous and complex economic and social crises, the last of which is caused by the spread of coronavirus COVID-19 – and is convergent in nature, the effects of which are felt in all spheres of society. The COVID-19 pandemic poses serious challenges for politicians and preconditions for an empirical analysis of the direct and indirect consequences of the pandemic for the development of the global economy. As part of the business crisis, Italian legislation is based on the principles of the 2019 EU legal framework, which include legal regulation for the management of economic entities, which allows to anticipate the business crisis, avoiding bankruptcy and improving the market. Legal regulation of the financial crisis contributes to the preservation of production capacity and employment, reduces the possibility of creating non-performing loans, which can negatively affect the balance sheets of banking institutions. A study by the Bank of Italy demonstrates the possibilities of avoiding insolvency if companies anticipate a business crisis by following bankruptcy deflation procedures, such as debt restructuring agreements and agreements with creditors. COVID-19 has led to a significant reduction in world GDP. Governments have different financial means to reduce the negative effects of the pandemic, but all consider the current economic moment exceptional, trying to postpone and mitigate the implementation of bankruptcy of many companies and enterprises in case of failure of legal systems. The results of the study show that the global recession will continue, and no country will avoid strengthening the legal regulation of administrative and accounting management, regardless of the strategy to mitigate the effects of the pandemic. The paper forms the opinion that today’s events require a coordinated multinational political response to the pandemic.

Keywords: corporate governance, financial markets.

JEL Classification: G280.

Cite as: Tommaso, F. D. (2020). The New Italian Legislation on Corporate Governance and Business Crisis. The Impact of Covid – 19 on SMEs and the Recent Rules to Mitigate the Effects. Financial Markets, Institutions and Risks, 4(4), 91-108. https://doi.org/10.21272/fmir.4(4).91-108.2020

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Alrabba, H. M. (2016). Measuring the impact of code of ethics on the quality of auditors’ professional judgment. Journal of Governance and Regulation, 5(4), 54-60. https://doi.org/10.22495/jgr_v5_i4_p4
2. Brewster, D. (2004, August 9). CalPERS wave-making brings flak. Financial Times Fund Management. Retrieved from: https://www.ft.com/fund-management
3. Butz, C. (2003). Decomposing SRI Performance, Geneva: Pictet & Cie. Retrieved from: https://scholar.google.com/scholar_lookup?title=Decomposing%20SRI%20performance&author=C.%20Butz&publication_year=2003
4. Cadbury Committee (1992). Report of the Committee on the Financial Aspects of Corporate Governance. Retrieved from: http://www.ecgi.org/codes/documents/cadbury.pdf
5. Collins, J. (2001). Good to great. London: Random House Business. Retrieved from: https://www.penguin.co.uk/books/104/1045846/good-to-great/9780712676090.html
6. Collins, J., & Porras, J. (1994). Built to last. New York: Harper Business. Retrieved from: https://www.amazon.com/Built-Last-Successful-Visionary-Essentials/dp/0060516402
7. Conference Board (2003). Commission on public trust and private enterprise: Findings and recommendations. Retrieved from: https://www.conference-board.org/pdf_free/SR-03-04-ES.pdf
8. Doyle, J. L., Colley, J., Stettinius, W., & Logan, G. (2005). What Is Corporate Governance? New York: McGraw-Hill. Retrieved from: https://trove.nla.gov.au/version/20047751
9. El Nashar, T. (2016). The probable effect of integrated reporting on audit quality. Journal of Governance and Regulation, 5(2), 50-58. http://doi.org/10.22495/jgr_v5_i2_p6
10. Eun, C. S., Resnick, B. G., & Sabherwal, S. (2004). International Finance. Wall Street Journal. Aril 9, 1996. Retrieved from: https://link.springer.com/content/pdf/bbm%3A978-3-030-02792-6%2F1.pdf
11. Ferri Di Fabrizio, L. (2017). The pattern of fraudulent accounting: Ethics, external auditing and internal whistle-blowing process. Journal of Governance and Regulation, 6(1), 12-25. http://doi.org/10.22495/jgr_v6_i1_p2
12. Feten, A., & Salma, D.-A. (2015). The use of international standards in ethics education in the Tunisian audit context. Journal of Governance and Regulation, 4(4-4), 499-506. http://doi.org/10.22495/jgr_v4_i4_c4_p7
13. Gimbel, F. (2004, April 19). US activist launches hedge fund (for corporate governance). FT Fund Management. Retrieved from: http://nylawyer.nylj.com/adgifs/decisions/120607hedgefund1.pdf
14. Gompers, P., Ishii, J., & Metrick, A. (2001). Corporate governance and equity prices (NBER Working Paper No. 8449). Retrieved from: https://www.nber.org/system/files/working_papers/w8449/w8449.pdf
15. Habbash, M. (2012). Earnings management, audit committee effectiveness and the role of blockholders ownership: Evidence from UK large firms. Journal of Governance and Regulation, 1(4-1), 100-116. http://doi.org/10.22495/jgr_v1_i4_c1_p1
16. ICGN (2002). Cross border proxy voting, case studies from the 2002 proxy voting season.London: International Corporate Governance Network. Retrieved from: https://www.icgn.org/policy/viewpoints/cross-border-voting.
17. IF AC (2003). Rebuilding public confidence in financial reporting: An international perspective. New York: International Federation of Accountants. Retrieved from: https://www.ifac.org/knowledge-gateway/contributing-global-economy/publications/rebuilding-public-confidence-financial-reporting-international-perspective
18. IFAC (2004). Enterprise governance: Getting the balance right. New York: International Federation of Accountants. Retrieved from: https://www.ifac.org/about-ifac/professional-accountants-business/publications/enterprise-governance-getting-balance-right-2
19. Kandemir, H. K. (2016). Auditing versus consultancy: a critique of the EU law reforms on the new form of auditing. Journal of Governance and Regulation, 5(3), 90-97. http://doi.org/10.22495/jgr_v5_i3_p8
20. Krauß, P., & Zülch, H. (2013). The relation of auditor tenure to audit quality: Empirical evidence from the German audit market. Journal of Governance and Regulation, 2(3), 27-43. http://doi.org/10.22495/jgr_v2_i3_p2
21. Larcker, D., Richardson, S., & Tuna, I. (2005, May 2). Ratings add fire to the governance debate. FT Mastering Corporate Governance https://aaapubs.org/doi/pdf/10.2308/accr.2007.82.4.963
22. Ledimo, O., & Martins, N. (2014). An audit of employee commitment to enable leaders to manage organizational talent. Journal of Governance and Regulation, 3(3-1), 128-133. http://doi.org/10.22495/jgr_v3_i3_c1_p6
23. Los Angeles Times (2004, April 3). Ex-exec tells of Adelphia fraud. Retrieved from: https://www.jstor.org/stable/29789727?seq=1#page_scan_tab_contents
24. McKinsey & Company (2002). Global investor opinion survey on corporate governance, London, McKinsey & Company.Standard & Poor’s Governance Services (2002). Corporate Governance Scores: Criteria, Methodology and Definitions, New York, Standard and Poor’s. Retrieved from: https://www.mckinsey.com/client_service/corporate_finance/latest_thinking/mckinsey_on_finance/~/media/DD152F22B7CC4B099913E114AC5558FB.ashx
25. Monks, R. A. G., & Minow, N. (2015). Corporate Governance (5thed.). Chichester, The UK: John Wiley & Sons Ltd. http://doi.org/10.1002/ 9781119207238
26. Murase, H., Numata, S., & Takeda, F. (2013). [Conference issue]. Journal of Governance and Regulation, 2(3), 7-23. http://doi.org/10.22495/jgr_v2_i3_p1
27. Special report: corporate governance, investors fight back. (2004, May17). Business Week. Retrieved from: https://www.sec.gov/Archives/edgar/data/1018724/000119312516530747/d78603ddef14a.htm
28. Tayan, B. & Larcker, D. F. (2015). Corporate governance matters: A closer look at organizational choices (2nd ed.). New Jersey: Pearson Education. Retrieved from: https://www.amazon.com/Corporate-Governance-Matters- Organizational-Consequences/dp/0134031563
29. Tricker, P. I. (2017). Corporate governance: principles, policies, and practices. Oxford, the UK: Oxford University Press. Retrieved from: https://global.oup.com/academic/product/corporate-governance-4e-9780198809869?cc=us&lang=en&