CORPORATE GOVERNANCE, RISK-TAKING, AND FIRM PERFORMANCE: EVIDENCE FROM ITALY

Using a balanced panel data of 82 Italian listed companies the relationship between corporate governance, risk-taking, and risk-adjusted performance has been investigated during the period 2002-2013, which includes both the pre-crisis time horizon and the one during the crisis. The results achieved provide evidence of a negative and statistically significant relationship between risk-taking and ownership concentration; conversely, there is a positive and statistically significant relationship between ownership concentration, risk-adjusted performance and Tobin’s Q. However, instead of a definite linear relationship between risk-taking, risk-adjusted performance and ownership structure, a non-monotonic relationship seems to emerge. The presence of independent directors in the board has a positive (negative) impact on firm performance (risk-taking), while a wider board is positively associated with both risk and the value of the firm.