Untangling The Antecedents Of Code Of Ethics Quality: Does Corporate Governance Matter?

In recent years, codes of ethics are becoming one of the most relevant examples of managerial tools firms are investing in to improve the transparency and effectiveness of their relationships with their stakeholders in response to the repeated corporate scandals and the deep economic crisis occurred. This study investigates the antecedents of code of ethics quality with specific regard to the peculiarities of corporate governance. Relying on a sample of 248 Italian public companies, five corporate governance characteristics were considered: the role of primary shareholders within the firm, the role and influence of independent directors within the board, the effect of board size on the strategic decision-making process, the influence of Chief Executive Officer (CEO) age and board diversity. The results suggest that investing in high-quality codes of ethics can influence the agency problem evident between ownership and control.