4.5.6 How is the disclosure of the corporate governance statement arranged and who is accountable for this disclosure?

As mentioned under section 4.5.5, the listed companies draft a corporate governance statement which is made available to the shareholders and sent to the Borsa Italiana. Subsequently, both the company and the Borsa Italiana publish the statement on their websites (Assonime and Emmittenti Titoli 2004, p. 70) (Weil, Gotshal & Manges 2002, p. 152). The introduction principle of the 2006 code states that information is to be provided specifying which code recommendations have been implemented and in what manner, and which recommendations have not been implemented and for what reasons. The Handbook on Corporate Governance Reports of February 2004, as published by the listed companies association Assonime and Emittenti Titoli, focuses on the drafting of the corporate governance statement and distinguishes between required and useful information to be mentioned in the statement.

The widely accepted Handbook recommends incorporating two separate sections in a company's corporate governance statement. Section one describes the company's corporate governance systems and mechanisms more generally and section two discusses the compliance with the provisions contained in the code (Assonime and Emmittenti Titoli 2004, p. 70). To be able to understand a company's code compliance more easily, three model tables, which should preferably be used, have been developed (Assonime and Emmittenti Titoli 2004, p. 70). The first table concerns the board of director's structure and the board's committees. The second table concerns the requirements regarding the board of auditors and the last compliance table sums up the code guidelines on delegations of authority, related party transactions, appointment procedures, shareholders' meetings, internal controls and investor relations (Assonime and Emmittenti Titoli 2004, p. 70). The companies the corporate governance code is applicable to should indicate their compliance by ticking the YES or NO boxes in the tables and, in case of non-compliance, give reasons. Unfortunately it is not indicated which table parts are exactly linked to which code requirements. The corporate governance information is to be provided in a special report that shall be made available to shareholders together with documentation for the shareholders' meeting and simultaneously transmitted to Borsa Italiana, which shall make it available to the public (Assonime and Emmittenti Titoli 2004, p. 70). Article 123(a)(3) of the Consolidated Law on Finance states that "the disclosures may be issued in a report separate from the management report, approved by the board ofdirectors and published with the management report. Alternatively, the management report may refer to a section of the issuer's website in which such a report is published".

The disclosure method as proposed by the Compliance Handbook seems to be common practice in Italy. Of the Italian companies in the research sample 81% (122 times) did indeed publish a separate special report and 19% (28 times) of them included the corporate governance statement in their annual report. The recommended model tables were part of 82% (123 times) of the corporate governance statements researched. Apart from the fact that it is not clear which part of the table corresponds with which code provision, some standardisation in the lay-out of the corporate governance statements can improve the readability. Nevertheless, the annual assessment reports of Assonime (see section 4.5.8) show a remarkable decline in the use of the tables in the most recent years (Annual assesment Assonime 2010, p. 16). Unfortunately, no explanation for this decline is provided. In Italy the board of directors is accountable for drafting the corporate governance statement. Both the 1998 code and article 123(a)(3) of the Consolidated Law on Finance make a reference to this matter: "the boards of directors oflisted companies are called upon to decide whether, and how far and how gradually, to comply with the corporate organisation provided for in the Code" (Italian Corporate Governance Code 1999, p. 18). The disciplinary measures if such board accountability is not provided are discussed under section 4.5.7 when the disciplinary measures of the CONSOB are discussed.