The Role of Boards of Directors in Transparency and Integrity in State-Owned Enterprises

Abstract

The chapter aims to analyse the influence of the board of directors on transparency and integrity in hybrid organisations like state-owned enterprises. The effect of several characteristics of directors on the board’s effectiveness was assessed. The empirical analysis was based on 60 Italian listed and non-listed state-owned enterprises. Each enterprise’s website was individually examined and coded to obtain two self-constructed indexes on transparency and integrity, and a regression model was created to test the hypotheses.

The ‘knowledge structure’ of interlocking directors and board compensation were found to be both positively related to the level of commitment among state-owned enterprises to transparency and integrity. Skill and gender diversity on the board had no significant impact. The analysis used data from a one-year period but dealt with hidden and complex phenomena like corruption. Future longitudinal studies and qualitative approaches would provide more comprehensive insights into the relationship between the board of directors, transparency and integrity over time.

Policymakers and all those involved in the appointment of directors to state-owned enterprises should be aware that some features of board members may affect the levels of organisational transparency and integrity. The chapter contributes to the literature on governance of state-owned enterprises, emphasising the board’s role and its effectiveness in sustaining transparency and integrity.

Citation

Cecchetti, I., Allegrini, V. and Monteduro, F. (2018), "The Role of Boards of Directors in Transparency and Integrity in State-Owned Enterprises", Hybridity in the Governance and Delivery of Public Services (Studies in Public and Non-Profit Governance, Vol. 7), Emerald Publishing Limited, Leeds, pp. 53-87. https://doi.org/10.1108/S2051-663020180000007001