"For the supervisory authority what is relevant is not, nor can it be, the governance systems that banks choose from among the different options allowed by the autonomy of bylaws, but the fact that those options are consistent with an arrangement of the governance and control functions that guarantees sound and prudent management [...]". This observation, taken directly from one of the papers composing this publication, concisely states the main theme of the analyses that the reader will find in the pages that follow.
With the adoption of the Supervisory Provisions Concerning Banks' Organization and Corporate Governance of 4 March 2008, the Bank of Italy used its powers on a path that balances between the common provisions of the Civil Code and special legislation for banks.
The reform of company law opens up a range of possibilities for intermediaries preparing to design banks' corporate governance structures. Their freedom of choice must be guided by a precise assessment of the management and control model that appears most suitable and likely to realize their entrepreneurial plans, in keeping with the principle of the equivalence of all the models.
In a legislative context of recent date, during a phase of interpretative consolidation and with what is still a scant body of court decisions to which to refer, the Bank of Italy dutifully focused on the need to ensure the actual neutrality of the governance structure adopted for the purposes of ensuring banks' sound and prudent management.
In drafting the Supervisory Provisions, rules were designed that no doubt diverge from the principles of company law and impose restrictions and differences, some of them important and significant, with respect to the Civil Code models. In other words, we will sometimes encounter derogations from the common provisions for companies limited by shares.
This is admissible if the regulatory intervention does not enter the area of provisions that cannot be waived and safeguard the essential points of the management and control models, an area which, though reduced as a consequence of the reform, defines an insuperable boundary.
And the intervention is legitimate, moreover, if the provisions of the Consolidated Law on Banking that assign to the Bank of Italy the powers of issuing secondary legislation are used effectively to ensure the sound and prudent management of banks.
The papers in this publication perform an initial exegesis of the most significant passages of the recent Supervisory Provisions Concerning Banks' Organization and Corporate Governance, showing how the balance has been struck between the Civil Code and special rules in regulating the forms of corporate governance and, in particular, the two-tier model.
A reading of the contributions suggest two further points for reflection.
Following the course already traced by the Basel II principles, the Bank of Italy, in adopting the Supervisory Provisions, has indicated the importance of corporate governance for the sound and prudent management of banks. In regulating certain aspects of the command and management structure, with departures, as noted, from the Civil Code models, the Bank has demonstrated that it believes in the relationship between correct and effective management and positive corporate performance.
A significant step that can lead to interesting developments.
In addition, in a recent normative framework that has still to be consolidated, the detailed rules of the Supervisory Provisions can suggest lines of interpretation that are also applicable beyond the sphere of banking, to the Civil Code bylaws of companies limited by shares, or, as one of the authors stresses, can represent a benchmark for other forms of regulation or self-regulation proper to other supervised sectors.
