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Ownership and control in local public utilities: the Italian case

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Abstract

The paper discusses the ownership and control structures of local public utilities by showing evidence from the Italian case. In this discussion, the focus is on three main aspects: the ownership structure, the board composition and independence, and citizens’ involvement (service charters). The main results from this study reveal that there are controversial aspects, which need further investigation. The existence of a principal–principal conflict is clearly arising from an in-depth analysis of the ownership structures. In addition, the board of directors, because of the lack of actual independence, does not seem to be a useful arena to manage and solve these conflicts. Other governance mechanisms are thus needed, to increase accountability to citizens. Within this, service charters seem to be a useful tool to protect the “public interest”. However, service charters content analysis suggests that further implementation actions are due. The paper contributes to the debate on conflicts of interests and governance mechanisms in local public utilities suggesting possible developments of agency theory and discussing implications for further research.

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Notes

  1. To solve this methodological problem we use information from the website to complement CVs information according to previous research.

  2. In some cases, the participation in equity is held indirectly, through corporations controlled by Local governments.

  3. In 2008 the Italian Legislator issued a Law (34/2008) in order to solve this problem and to limit the power of direct nomination by the public shareholder. However, this Law is actually subject of various criticism and the paper does not catch its effects because the analysis is on 2008 data.

  4. Only those shareholders who, alone or together with other shareholders, represent at least 1.0% of the shares with voting rights at ordinary shareholders’ meetings shall be entitled to present lists. Within each list, candidates must be ranked progressively. The list obtaining a majority of votes will elect a certain percentage of the directors. The remaining directors will be drawn from the other lists.

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Authors and Affiliations

  1. Witten Institute for Family Business, Witten/Herdecke University, Alfred-Herrhausen-Straße 50D, 58448, Witten, Germany

    Andrea Calabrò

  2. Reinhard-Mohn Institute of Management and Corporate Governance, Witten/Herdecke University, Alfred-Herrhausen-Straße 50D, 58448, Witten, Germany

    Mariateresa Torchia

  3. Department of Business Studies, University of Rome Tor Vergata (Italy), Via Columbia, 2, 00133, Rome, Italy

    Francesco Ranalli

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  1. Andrea Calabrò
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Calabrò, A., Torchia, M. & Ranalli, F. Ownership and control in local public utilities: the Italian case. J Manag Gov 17, 835–862 (2013). https://doi.org/10.1007/s10997-011-9206-1

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