The effects of Solvency II on corporate boards: A survey on Italian insurance companies

Governance and the internal control system represent a fundamental pillar in the Solvency II Directive. In that context, the insurance companies’ board plays a key role in assuming new responsibilities and duties. The present work aims to examine the role of insurance companies’ boards in view of the important changes introduced by Solvency II. An empirical analysis is conducted on a sample of 102 Italian insurance companies. Three areas of investigation, size and composition, board self-assessment processes and board remuneration policies, are covered by the survey. The results show a satisfactory level of compliance of the boards with respect to the requirements established by Solvency II. There is still room for improvement as regards the level of disclosure and diversity. The paper contributes to deepen the understanding of Solvency II effects on the composition and functioning of insurance companies’ boards. In addition, the study provides, through the Italian case analysis, some indications on the likely future development of the insurance companies.