Anglo-American Governance Model

In the Anglo-American governance model the role of the dual CEO and board chairman is becoming less common (Buchanan & Yang, 2005). In fact, most international corporate governance codes of best practice recommend the separation between chief executive and chairman (Melis, 2005). The Milan Stock Exchange introduced the Preda Code, which was a code of best practice. It was adapted from the Anglo-American model and does not explicitly recommend splitting the two titles of chairman and chief executive officer (Buchanan & Yang, 2005). Thus at Parmalat, Calisto Tanzi is not only the founder of the company, but also the chief executive as well as the chairman. Since he was also the major shareholder of the company, these circumstances gave him a

According to an article in The Economist (2004), the CEO Calisto Tanzi and the CFO showed close collaboration during the years leading up to the scandal. In the spring of 2003, a €600 million bond issue fails, thus causing a 10% fall of Parmalat stocks in one day, which made financial manager Tonna decide to leave the company (Celani, 2004). Tonna later admitted that he created the $3.9 billion account with a scanner, scissors and glue (Celani, 2004). Being in jail, he also stated that the financial statements had been wrong for a long period of time, without mentioning an exact number. Tonna’s replacement was the former Citibank employee Alberto Ferraris. Even though the new chief financial officer ensured that in order to pay the Group debt, only cash would have been used, it became clear that Parmalat had privately placed a new bond, while the amount of all pending bonds was still unknown (Ferrarini & Giudici, 2005). In total, Parmalat’s management tried to cover up losses, recorded assets that were non-existing, minimized their debt and diverted cash of the company to Tanzi family members (SEC, 2004). These forensic accounting shows similarities to the Enron scandal and makes clear that in this case the people involved are the ones to be blamed.

Clearly another reason behind the Parmalat bankruptcy is the fact that the gatekeepers, especially the external auditors, were not doing their job properly. In addition to that, there were not being careful enough and too involved in the whole scandal and thus there was a conflict of interest. In the following, we will discuss the role of the gatekeepers with a detailed view on the auditors, banks, analysts and the code of conduct.

3. The Role of