The notion that business corporations should be managed for the exclusive benefit of shareholders has been widely challenged. In particular, critics have argued that directors are authorised to serve the interests of the corporation: a legal entity that is completely separate from its shareholders. However, the premise that shareholders have sole legitimate claim to ‘membership’ has rarely been questioned. This article explores medieval thought on ownership, authority and participation in guilds, churches, towns and universities, and shows that membership can be understood as participation in, and shared responsibility for, a group's distinct collaborative activity over time. Our theory suggests that ‘membership’ in the modern corporation extends to non-shareholding stakeholders, but with the implication that ownership and authority are vested in the members as a body and not in a separate entity.

This essay takes stock of the corporate governance reform efforts in which Italian policy makers have engaged since the beginning of the 1990s. After describing the reform process and its drivers (a concern for Italian equity markets' attractiveness in an increasingly competitive and global framework, scandals, and EC activism) the essay analyses the main reforms to single out what has worked (i.e., what has had a practical positive impact on Italian listed companies' corporate governance) and what has not. After concluding that the corporate governance legal framework has greatly improved as a result of reforms, the essay identifies a number of areas where further steps could be taken to protect investors against the risk of expropriation by corporate insiders. It is also argued, however, that the mother of all corporate governance reforms in Italy would be a change in legal and political culture; legal culture should change so as to put substance over form, function over doctrine. That would be a precondition to effective enforcement of corporate and securities laws. Political culture should change from one that deems it to be the norm for politicians to decide on the allocation of corporate control to one more respectful of property rights. Finally, two modest, bottom-up proposals to help change legal culture in the long run are put forth.

Based on twenty-five semi-structured interviews with company chairmen, we were able to establish that there is resounding support for the split of the positions of chairman and CEO. In addition, chairmen play a key role in making the board a success, partly by establishing the right tone and procedure at the top. The chairmen we interviewed believe that the quality of boards has improved over the last ten years and that directors take their responsibilities more seriously. However, the drive for better corporate governance, though generally welcome, has in some respects become counterproductive.