Structuring supervisory board for an anti-corruption strategy: a new application of a compliance system

Abstract

Purpose

The aim of this paper is to examine a relevant innovation in terms of how corporate supervisory boards are structured for an effective measure of anti-corruption that concerns a new application of Italian Legislative Decree No. 231/2001 in compliance with the obligations set out by OECD Convention of 17 September 1997 on the fight against corruption.

Design/methodology/approach

The research hypotheses which lead the study are based on an empirical analysis of 119 nursing homes with the aim of investigating the state-of-the art of this innovative application especially regarding the composition, effectiveness and functioning of the supervisory board in the unique case when this compliance system becomes compulsory.

Findings

The results show how, even though a certain level of uncertainty and ambiguity have led to great variance in the ways the compliance system is drafted, was possible to identify a positive relation between supervisory board composition and performance – that is the effectiveness of anti-corruption system – and a negative relation between board size and performance. Finally, the results suggest the relevance of supervisory board in fostering knowledge as mediating role.

Research limitations/implications

The authors believes that future work using inter-temporal modelling could build upon and extend the insights presented here. A second area arises from those contrasts in board characteristics that are present across countries and/or across company’s size, small- and medium-sized enterprises or multinational companies and/or across industrial sectors.

Practical implications

The authors offers a more nuanced understanding of the linkages between corporate governance and anti-corruption. In particular, the paper suggests that for an effective anti-corruption strategy, larger supervisory board sizes are associated with weaker performance, and a greater external composition is preferable to an internal one.

Originality/value

The paper depicts a first and relevant step toward the identification of best practices of corporate governance as anti-corruption system, relating to an innovative and unique – to the date – application of a compliance system based on the supervisory board.

Citation

Previtali, P. and Cerchiello, P. (2017), "Structuring supervisory board for an anti-corruption strategy: a new application of a compliance system", Corporate Governance, Vol. 17 No. 1, pp. 48-63. https://doi.org/10.1108/CG-09-2015-0126