Control System in the Bank Sector: Towards an Integrated Approach?

In business economics, analysis and theoretical aspects concerning corporate governance has been differently study in doctrine, and have observed a particular intensification in the '90, according to emerging factors and transformation in the markets. Most of the researchers individualize a fundamental passage in the reflections made by Berle e Means (1932), that in their books is set in prominence one of the most important question in the debate on the corporate governance: the separation among ownership and control. In that book, for the first time, the Authors analysed in systematic way role and problem of companies corporate governance, in relationship to the interests of the owners and of the other stakeholders, using an approach that placed side by side from juridical reflections to economic and social ones, with particular reference with the theme of corporate management and control systems. Assuring coherent and effective management and control activities that allow the development of the enterprises has become a necessity of primary importance for companies that in the carrying out their business activity cannot anymore underestimate critical aspect of a normative context in continuous evolution. If firms would miscalculate these aspects, they could suffer a serious loss of competitiveness in, and of appreciation of, the financial markets. Nowadays the economic and normative scenery in which companies operate is liable of sudden changes that make a priority of a cultural change in the approach to the control systems. Control activities should not anymore be meant as simple activities of a posteriori controls usually in a repressive vision, but rather as essential tools of prevention of economic and reputational losses that could be fatal for the business development. Today, such aspects are even more critical and remarkable if observed with reference to banking activities. In the Italian bank sector specific control functions that involve internal tasks, other functions and institutes external to the enterprise are placing next to the typical control activities of listed enterprises. It is the case, linked to inside controls, of the functions turned to the monitoring of the activity of compliance, rather than to the management and control of the business risks (risk management). Banks have a strong necessity to link the activity of control a posteriori with a coherent and planned management activity a priori, with evident interrelations with the planning and management control system, trough an integrated approach to the control system. With reference to the external controls, banks are submitted to the further permanent controls on behalf of specific vigilance organism, the Bank of Italy. For the reason above mentioned, it is very interesting to analyze those aspect in this specific moment. Infact, if only one takes account of the different guardianship models of institutional interests, adopted or imposed after the recent financial scandals that have struck the American and European markets, the analysis of the structure of the control system is particularly actual. As it is widely known, these events have mined to the base the preceding control system of the firms, whose validity has still to be verified at empirical level. Then, this subject is also particularly relevant as a consequence of the role and interests developed by banks in the national and international arena, as well as by the well known upsettings that have recently involved credit markets. I am hereby referring above all to Basilea 2 standards and to the borrowing of subprime, and intensified the necessity to manage and control the business risks and to develop the function of compliance. The aim of the work is to verify the configuration of the control systems in the firms as applied in the present economic and legal framework. I will develop this holistic approach to the control system with particular reference to the firms operating in the bank sector, where internal and external pushes to the change in the approach to the control systems are increasing more and more. The subject at issue has a relevant theoretical importance as it could determine the necessity to re-consider the approach to the control systems of the firms, determining a greater integration with the aspects of management and corporate planning. The aim of the development of an effective and efficient control system can be reached going farther than the mere compliance with legal requirements, to the performance measurement and to the management of the knowledge as integrated elements of control and governance system. Besides, a further element of theoretical interest is represented by the nearly general tendency in the international scenario to progress to the configuration of a control system of firms structured in the way referred to above (integrated governance). In view of the considerations above, it is of extreme interest an empirical analysis developed through semi-structured questionnaire and interviews in an Italian Bank (Cariparma Credit Agricole). The study has the aim of verifying and analysing some fundamental aspects and changes concerning the control system in the bank sector, that are:  if really the macroeconomic changes, the recent critical events, the frequent merger operations that have interested banks, and the evolution of the characteristics of the enterprises working in the bank sector has determined the rise of a control system different by that one previously developed;  if such elements and such innovative factors have determined a greater convergence, a taking back to synthesis of the control system a priori (management control) with internal control activities, during the action and a posteriori;  if the changes of the control system have determined the involvement of new subject and of new business functions;  if those changes are caused, and the process is so defined in the enterprises, only because required by laws or rules, or because the demands of the business management has required a so defined implementation in the fact;