Corporate Governance Diagnostic, a new online tool to assess “good governance”

A partnership between SDA Bocconi and PwC TLS


Does our governance fit our evolving world? This is a question entrepreneurs ask (or should ask) themselves more and more often. An answer can be found in our online Corporate Governance Diagnostic - Sustainable Governance Assessment for Private and Family Business, the first project to come out of the partnership between PwC TLS and SDA Bocconi, set up to stimulate debate on corporate governance with a focus on private companies, trying to overcome the long-standing gap between them and listed or regulated companies.

This analytical tool has been created by a multidisciplinary team, composed of academics from SDA Bocconi, Daniela Montemerlo, Valentino D'Angelo and professionals from the consulting firm, led by Alessandro Minichilli, Director of SDA Bocconi’s Corporate Governance Lab and Fabrizio Acerbis, Managing Partner of PwC TLS. A technical planning and development team defined an analytical method enabling companies to evaluate their own level of adoption of good governance criteria. PwC TLS’ Digital Lab was also part of the project, developing the digital platform for companies to use.

Based on data provided by entrepreneurs and thanks to a proprietary, dynamic and adaptive algorithm progressively processing anonymous answers, our Corporate Governance Diagnostic returns profiles of governance adequacy in accordance with ownership complexity and corporate structure. The following areas are explored:

  • ownership governance,
  • corporate governance,
  • compliance checks,
  • ESG (Environmental, Social, Governance) factors.

The tool then generates a self-evaluation report by weighing the answers. The quality of the evaluations offered by the tool may be influenced by the role of the respondent within the company. For this reason answers should be given by the top subject only (the entrepreneur or executive director).

It is widely believed that good governance fosters economic efficiency and business growth by increasing investor confidence and thus the availability of better resources, talent and capital on more favorable terms. The failure of many generational transitions (also due to weak governance) and the still widespread presence of sole directors indicate that Italy is still thinking too little about these issues. Although principles and practices of good governance have spread in time, companies are slow in applying them and tend to approach them in terms of compliance rather than in terms of strategic choices.

However, effective governance is increasingly becoming a key to ensuring long-term sustainable growth, by strengthening confidence between institutions, markets, companies and people. More and more, ESG factors will affect the ability of private companies to access the market in terms of financial resources, access to consumers and other stakeholders, as well as potentially in terms of their ability to leverage incentives and, in general, to shape their structure in order to ensure continuity.

Thus early evaluation is mandatory not only regarding corporate social and environmental sustainability (which is already an increasing concern among the various categories of stakeholders), but also sustainable ownership and corporate governance, which is a precondition for companies to be able to fully position themselves in ESG terms.

SDA Bocconi School of Management.

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