Board Structure and Auditors: The Italian Experiment and Lessons for the Future BIICL, London – 19 November 2004 Marco Ventoruzzo - Università L. Bocconi, Italy

Directors’ Competences, Board Structure and Directors’ Liabilities Broader competences, especially in the definition of the financial structure; Role of non-executive directors; Independent or Minority Directors? Executive Chairman? Conflicts of Interest and Related Parties; Less Rigorous Civil Liabilities?

Internal Board of Auditors Increased Independence Requirements; Overlapping of competences between internal auditors and non-executive directors; Increased Liability?

External Auditors Competences confined to accounting and financial statements and economic aspects of financial transactions (LBOs; issuing price of shares…); Deja-vu with some of the principles of the Sarbanes- Oxley Act; Rotation and cooling off of organizations, but of individual professionals within the organizations? Exchange of information with internal bodies: the need for more precise rules; Clear rules concerning civil liabilities?

Broader Conclusions Market for rules in the absence of effective regulatory competition is simply contractual freedom; If more regulatory competition and freedom of movement for corporations and investments, more extensive harmonization is needed also in corporate governance issues; Need for a stronger theoretical framework, at the European level, to distinguish what should be left to self-regulation and what should be left to statutes; Enforcement mechanisms.