This paper investigates the determinants of regulatory compliance in corporate organizations. Exploiting a unique enforcement and reporting framework for insider trading in Italy, we present three main findings. First, board governance, such as chief executive- chairman duality and the proportion of non-executive directors, does not increase the propensity of firms to comply with regulation. Second, family firms and firms with a high degree of separation of ownership from control are most likely to comply with regulation. Third, corporate ethos is more important in predicting regulatory compliance than explicit corporate governance structures.
- regulatory compliance
- corporate governance
- insider trading
- family firms
Bajo, E., Bigelli, M., Hillier, D. J., & Pertacci, B. (2009). The determinants of regulatory compliance: an analysis of insider trading disclosures in Italy. Journal of Business Ethics, 90(3), 331-343. https://doi.org/10.1007/s10551-009-0044-x