What legal changes are needed for Italy to tighten up its regulatory and accounting practices?
The Parliament has to strengthen accounting and oversight rules. Consob, the stock-market regulator, needs more power and authority to control companies. And the penalties for fraud must be higher. The challenge is to not introduce overregulation. We need some new laws to guarantee transparency, but most of the governance issues should be left to self-regulation. Q: Some criticize Telecom Italia for the chain of holding companies that sit above the main business unit, Telecom. They say such holding companies obstruct good governance by allowing maximum control with a minimal stake, limiting transparency, and letting those who control the company make decisions that could harm small shareholders. A: Telecom Italia has made the most progress in this regard. In one year we collapsed Olivetti into Telecom Italia and the Pirelli Group chain as well. So instead of four listed companies, we now have two. Q: Good structures are no guarantee against corporate-governance bombshells. Failure ofte
