EXPERT INSIGHT 70 WWW.LAWYER-MONTHLY.COM | APR 2022 Enshrining Corporate Governance in Your Business Plan C The strengthening of corporate governance has been identified as an important growth factor for businesses internationally. A greater focus on corporate governance has also been enshrined in recent legislation, particularly by the Italian government. We speak with Fausto de Angelis on why this aspect of business is crucial for entrepreneurs and how it can best be included as part of a company’s strategy. an you give us a brief summary of the current corporate governance climate in Italy and significant trends that you are seeing? In my experience of providing legal business advice to SMEs, I am seeing how greatly corporate governance is growing in terms of importance as a “key success factor” in company strategy. Why do you think corporate governance is now being recognised as an important driver of business success? More people are now coming to realise that sustainable growth and ESG are crucial concepts for the strategic agenda of any company that aims to develop its business and increase its market share. The building of a strong and effective corporate model has clearly become one of the most fundamental parameters for measuring a company’s competitive advantage and sustainable growth prospects. What other trends do you expect to see developing in the corporate governance climate? I see some other trends which, to certain extent, can also be seen as connected with corporate governance and which can be used as a booster to speed up their implementation within organisations. Hot areas at the moment include legal design, cybersecurity, artificial intelligence and fintech. How has the adoption of the Italian Corporate Governance Code 2020 affected SMEs and larger organisations? With the introduction of the Corporate Governance Reform in 2020 there is certainly much more of a focus among entrepreneurs on making sure corporate and organisational structure is sustainable and adequate to serve their business model. There is no doubt that the Reform represents a significant driver of change towards the strengthening of competences and tools in this side of business. Have there been any other legislative developments regarding corporate governance in your jurisdiction? Over the last few years in Italy I have seen a much greater effort by businesses to achieve compliance with Law 231, which has imposed the use of internal control systems and risk assessments to address the criminal liability of companies. It is essential for a leading entrepreneur to enshrine corporate governance as a part of their company’s strategic plan equal to its business objectives.