Qualità della governance e costo del capitale di rischio: un'analisi sul mercato italiano

The aim of this paper is to investigate how the quality of corporate governance (CG) impactson the cost of equity capital (CEC). The research has been carried out on a sample of companieslisted on the Italian Stock Exchange on 12/31/2009. The selected CG attributes (board independence,board size, existence of the audit and the nomination/remuneration committeesand independence of board committees) have been used to construct a comprehensive corporategovernance quality index (CG score), regressed on the CEC, controlling for differencesin the Fama and French (1993) risk factors. The results provide evidence of a significant associationbetween the CG score and the firm’s cost of equity capital. The study has both empiricaland practical implications. The implications for the empirical literature of the existence ofa direct effect of CG on CEC could be the addition, to the actual business evaluation modelsof the investors, of a governance risk premium in order to capture non-diversifiable risk associatedwith weaker governance. As regards the practical implications of the study, for managers,a stronger awareness of the impact of CG on CEC could help them in implementinggood internal CG mechanisms