MEGA YACHT, ITALIAN LEADERSHIP AND FINANCIAL CRISIS. EMPIRICAL EVIDENCE ON HOW ITALIAN LEADING COMPANIES IN MEGA YACHT SECTOR OVERCOME THE CRISIS

The current financial crisis is one of the most studied topics, which attracts the attention of many academics seeking to analyze its causes and impacts. Nevertheless many studies on this issue, the crisis effects on specific industries is still unexplored. The present research seeks to study this topic by analyzing the mega yacht sector with particular emphasis on two world leaders, i.e. Azimut-Benetti and Ferretti. The purpose of this study is to assess if they succeed to tackle the financial crisis, keeping a satisfactory level of profitability associated to a good financial health in spite of the financial crisis. Furthermore, we analyze the strategies those shipyards implement to survive the crisis. The concern of this research is both qualitative and quantitative. Hence, we calculate a complete set of financial ratios adopting a specific methodology for financial statement analysis, taking into account 2006-2013 financial years. That data is integrated with other information retrieved from companies annual report (i.e. the notes to the accounts, management reports and supervisory board reports). This study finds out that both companies suffer financial health and they do not register a satisfactory level of profitability, as well as a low rate of liquidly because of an excessive reliance on current liabilities. However, the key strategies to succeed are ongoing investments in state-of-the-art plant and machinery, an increasing use of equity (even though it is eroded by losses), along with steadily investments in R&D, trademarks, licenses and international nautical fairs

Corporate Governance: the relationship between Board of Directors and Firm Performance. Empirical evidence of Italian listed companies

Corporate governance is an international topic which is studied in depth in several research fields, such as accounting, management, finance, economics, etc. The 20th century witnessed massive growth in corporate governance issues in terms of theories, practices and empirical research. Thus, corporate governance, including the board of directors, has become one of the central issues in the running of company, due to worldwide and rapid change in environmental conditions and the current economic, financial and social context which is changeable, dynamic and globalized. Indeed, the board of directors of a firm, i.e. the governing body of every corporate entity, is ultimately accountable for company decisions and its performance. The board of directors, which is a fundamental asset of the firm and one of the pillars of corporate governance, is responsible to owners, members, and other legitimate stakeholders in terms of decisions, strategies and firm performance. This research analyses the effect of some corporate governance variables on performance by extending such variables and performance measures of previous studies. Thus, the object of the present research is corporate governance, and in particular the board of directors, its mechanisms and processes related with firm performance. The purpose of this research is to measure and quantify the relationship between the board of directors and performance of Italian firm listed on STAR segment (Italian Stock Exchange). Most studies in corporate governance analyse this relationship, but the majority are concerned with Anglo-American countries, emerging and developing markets and some European countries. Italy seems to have been left out of this research although it is an interesting case. Indeed, Italian corporate governance model presents some features in common with two archetypes existing in literature, i.e. Anglo-Saxon and German-Japanese models. However, the Italian model has some distinctive characteristics which are different from the two main corporate governance models. In particular, little research has been conducted in Italy to measure the relationship between board of directors mechanism and performance in listed companies by using single variables tested in an econometric model. This research is thus explanatory and has adopted positive methodology; its aim is to better understand whether agency theory which is the predominant approach in literature, is confirmed in the Italian context. We adopt agency theoretical approach of corporate governance by focusing on the relationship between board mechanism and corporate performance. The board mechanisms we study are consistent with prior research, namely board size, board composition (i.e. independent, non-executive, executive directors), CEO duality, Audit committee and Big Four (1). There is no relevant research which focuses on the relation Big Four-firm performance. On the other hand, firm performance is measured by Tobin's Q (market value) and ROE (accounting measure); moreover a set of control variables are introduced. Testing our econometric model on a population of Italian firms listed on STAR Segment (Italian Stock Exchange), we find some interesting results. In short, not all our empirical hypotheses are verified, for example we do not find that an increase of independent and non-executives directors leads to an improvement on firm performance, as agency theory states. Furthermore, CEO duality is not the worst leadership that a firm might adopt as agency approach maintains. It follows that agency theory is probably not able to explain the complexity of the relationship between the board of directors and firm performance. This means that there is oversimplified vision of the company related to complexity of the environment in which the firm operates and to intricate mechanisms including procedures within the firm (Daily et al., 2003b). Agency theory provides unduly simplistic assumptions which do not reflect the real environment, leading to a failure of empirical findings to support its basic principles (Daily et al., 2003b). Finally, given the complexity of board mechanisms, empirical results which do not support agency assumptions and the increased variety of interests, it follows that our findings may be interpreted through a relatively new theoretical lens, i.e. multiple agency theory (Arthurs et al., 2008). The latter seeks to go beyond the simplistic assumptions of agency theory, to dismantle fortress of that overwhelming approach and to open the black box of the board processes (Daily et al., 2003). -- (1) Big Four are the largest international audit firms; in particular they are Deloitte, PriceWaterHouseCooper, Ernst&Young, and KPMG

How far that little candle throws his beams! An interview with Mats Isaksson

This article adopts a policy-maker perspective on corporate governance, while exploring the role of academia in influencing corporate governance principles, the reasons for the boilerplate approach to governance rules typically adopted by most companies, and the reasons for a possible disconnect between research and corporate governance policies. The article ends with some key lessons about corporate governance and the future research agenda

The efficiency of the top Mega yacht builders across the world: a financial ratio-based data envelopment analysis

This research provides an application of a non-parametric analytic technique (Data Envelopment Analysis, DEA) in measuring the performance of the mega yacht sector. It analyses the efficiency of the top mega yacht companies across the world in 2005-2013 by offering a model useful for comparing inefficient shipbuilders with the efficient ones. This paper adopts an output-oriented version of DEA based on financial ratios where inputs are not utilised. In order to handle missing data, we test and compare two different techniques: the deletion one and the multiple linear regression analysis (MLRA). We find that DEA can be a complement or alternative tool to ratio analysis to evaluate corporates’ performance. We also find that the most efficient shipbuilders are those based in the most prosperous countries. Finally, the MLRA efficiency scores are more reliable and consistent with the firms’ annual reports and financial ratios

How smart technologies can support sustainable business models: Insights from an air navigation service provider

Purpose: Although research on smart technologies explains their critical importance in sustainable business models (SBMs) (Mikalef et al., 2017), it remains unclear how organisations can embrace smart technologies to create and/or improve their sustainable business models. The purpose of this paper is to unravel and address the challenges of smart technologies to build and maintain a sustainable business model for organisations. Design/methodology/approach: The research develops an empirical analysis through a case study approach. We have investigated the case of ENAV – an Italian air navigation service provider – and how this firm uses smart technologies in the creation of its successful SBM. After constructing a basic theory, the authors moved to evidence collection. The data analysis has adopted a qualitative approach based on a thematic analysis of the transcripts and related documents. Findings: The findings from the case study support the idea that the business value and the strategic relevance of smart technologies still remain largely underestimated in SBM adoption (Mikalef et al., 2017). Case study findings suggest that until today smart technologies have played a minimal role in SBM adoption. However, the smart technologies show the potential to inform the SBM adoption process by contributing to corporate communication for external stakeholders and to the main dimensions of SBMs such as safety and security or the respect for social and environmental criteria in the supply chain. Practical implications: This study seeks to support organisations and their directors to build and improve sustainable business models through smart technologies to maintain their competitive advantages. Specifically, our findings suggest that smart technologies can help organisations bridge the design–implementation gap of sustainable business models. Originality/value: This research advances our understanding of the role of smart technologies by explaining how they can enhance sustainable business model adoption. Indeed, we offer a comprehensive view of the integration of insights from three different but related literature streams such as sustainability strategies, smart technologies and change management studies