A Primer on Corporate Governance

CHAPTER 2

Institutional Framework of Corporate Governance in Italy

Major Corporate Scandals

In his study of corporate frauds in 12 countries around the world, Jones (2011: 3) pointed out that frauds are “perennial” and “occur in all eras and in all countries.” Although some characteristics of these corporate scandals seem to be almost universal (Jones 2011), different types of scandals tend to characterize different systems of corporate governance. In particular, dispersed ownership systems of corporate governance (such as the U.S. and the U.K. models) have been found to be prone to forms of earnings management and sophisticated accounting fraud committed by top managers; in contrast, corporate systems with a high level of ownership concentration—which ...