European corporate governance: Cleaning the Augean tables

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If Greece goes...




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European corporate governance






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PARIS





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WHEN Cesare Geronzi took over as chairman of Generali, an insurer, last year, many investors shuddered. Mr Geronzi's past has long been under scrutiny: prosecutors demanded in March that he go to prison for his alleged role in the bankruptcy of Cirio, a food company, in 2003. As chairman of Generali he quickly announced a new strategy for the firm to expand in Latin America which its chief executive and board had not even discussed. The insurer, he argued, could invest in a controversial project to build a bridge to Sicily, which some people think might indirectly enrich the mafia.
So when directors revolted and Mr Geronzi unexpectedly resigned in April, many investors saw it as a good day for European corporate governance. Europe's companies are not as ill-governed as some of its countries, but investors have a barrel full of justified gripes. One is the dominance of large shareholders; minority investors often lose out. Fortunately, thanks to a series of ...