Institute Recommends Mandatory Adoption of Italian Corporate Code of Conduct

Washington, DC, January 11, 2000 - In October 1999, a committee of the Borsa Italiana (the Italian Stock Exchange) issued a report setting forth principles that would improve the corporate governance of companies listed on that exchange. The report included a model Code of Conduct, and recommended that Italian companies listed on the exchange voluntarily adopt it.

Last week, the Institute encouraged the Borsa Italiana to go beyond the committee’s recommendation and make the adoption of the Code a prerequisite to listing shares on the exchange. The Institute’s letter argues that Italian companies that adopt the code are both serving the best interests of their shareholders and more likely to attract foreign investors, who generally prefer to invest in companies that follow good corporate governance principles.

The Institute also sent letters to the CONSOB (Italy’s principal securities regulator) and the Bank of Italy recommending that those regulators consider requiring all Italian companies to adopt corporate governance principles similar to the Code, whether or not those companies are listed on the Borsa Italiana.