Governance: what it is, models, regulation and why it defines a company's value

Governance is the system of rules, processes, structures, roles and behaviours through which an organisation is directed, controlled and steered towards its purpose. It is not a corporate department, not a document, not compliance: it is the decision-making architecture that determines who decides what, how, with what information and accountable to whom. The 1992 Cadbury Report defines it, in the most widely quoted formulation in the world, as “the system by which companies are directed and controlled”. The OECD, in its principles updated in 2023, extends it to the relationship between management, board, shareholders and stakeholders. Governance is the discipline that separates the companies that endure from those that implode. The term governance is among the most overused in Italian business vocabulary. Boards use it to talk about themselves, IT managers to refer to the control of IT processes, ESG consultants to mean the “G” in the acronym, entrepreneurs to describe, loosely, “the way I run the company”. They are all right, and precisely for this reason none of them is precise. In this guide, written by the strategy team at Bliss Agency on the basis of the leading regulatory and academic sources (Cadbury Report, OECD, ISO, Borsa Italiana, Italian Civil Code, Treccani, Consob, European Commission), you will find:

1. the correct definition of governance and its etymology;

1. the history of the discipline from 1992 to the OECD 2023 principles;

1. the six types of governance (corporate, IT, data, AI, ESG, brand) with concrete Italian examples;

1. the three corporate governance models provided for under Italian law and when to choose each;

1. the international principles (OECD + ISO 37000:2021) put into practice;

1. an Italian case study: Parmalat and what it taught the country;

1. the updated regulatory landscape (CSRD, Legislative Decree 125/2024, EU AI Act);

1. a comprehensive FAQ covering the questions boards ask most often.

The aim: to end the semantic confusion and provide an operational reference for anyone who sits on a Board of Directors or an Advisory Board, or is structuring their company’s governance for the first time.

1. What governance is: definition and context

The operational definition

Governance is the system of rules, roles, processes and control mechanisms that oversees the direction of an organisation. It defines who makes decisions, by which criteria, with what information, accountable to whom and with what consequences. Treccani, in the Dizionario di Economia e Finanza edited by Silvia Giacomelli, frames it as “the exercise of authority, direction and control“, specifying that, with reference to companies, it denotes “the set of rules and processes through which they are directed and managed“. The area of greatest interest, again according to Treccani, is corporate governance, that is, the governance of companies. In the G20/OECD Principles of Corporate Governance, updated in 2023 and endorsed by G20 leaders in September of that year, the OECD provides the international reference definition: corporate governance concerns the set of relationships between management, the board, shareholders and stakeholders, and provides the structure through which objectives are set, the means of achieving them are determined and performance is monitored.

The etymology: who steers the ship

The term governance comes from the Latin gubernare (“to steer a ship”), itself from the Greek kybernáein (the same root as “cybernetics”). Treccani records its arrival in Italian in 1994, via La Repubblica, always paired with the adjective corporate. Only in 1997 does a “detached” governance appear in Italian for the first time, free of its original corporate label, in reference to the “bodies of international economic governance”. The image of the helmsman is the most precise metaphor there is for understanding governance. The helmsman does not row (that is the job of operational management), does not see the ship from outside (that is the job of advisers), does not choose the destination port (that is decided by the shareholders’ meeting, i.e. the owners). The helmsman decides how and when to change course, taking account of the wind, the currents, the stars, and both foreseeable and unforeseeable risks. Governance is the system that provides reliable information and prevents the helmsman from changing course while ignoring the crew, or from steering the ship wherever he alone wishes.

The three constituent dimensions

Since Cadbury, the literature has consistently identified three constituent dimensions of any governance system:

1. Direction (who sets the strategic course);

1. Control (who verifies that the course is being followed and that the information is accurate);

1. Accountability (to whom management and control answer, and with what consequences).

When any one of these three dimensions is weak, the system collapses. The Parmalat case, which we discuss in section 7, is the best-known Italian demonstration of this principle.

2. The history of governance: from the Cadbury Report to 2026

Governance as a formalised discipline is young: in practice, it was born in December 1992. Understanding the four historical turning points that define it helps you use it well today.

1992: the Cadbury Report (UK)

In 1991 the London Stock Exchange set up a committee chaired by Sir Adrian Cadbury to address the growing number of British corporate scandals (BCCI, Polly Peck, Maxwell). The final report, Financial Aspects of Corporate Governance, published in December 1992, contains the definition that would become the global standard: “Corporate governance is the system by which companies are directed and controlled“. Cadbury introduced concepts we now take for granted: separation of the Chairman and CEO roles, independent non-executive directors, an audit committee and the “comply or explain” principle. Source: Wikipedia, Cadbury Report, quoting the original document directly.

1999, 2004, 2015, 2023: the OECD Principles

The OECD first published the Principles of Corporate Governance in 1999, with revisions in 2004, 2015 and 2023. The 2023 version, developed jointly with the G20 between 2021 and 2023, is today the international benchmark for legislators and regulators in 49 jurisdictions worldwide. The principles are included among the Financial Stability Board’s Key Standards for Sound Financial Systems and form the basis of the World Bank’s Reports on the Observance of Standards and Codes (ROSC). Source: OECD (2023), G20/OECD Principles of Corporate Governance 2023, OECD Publishing, Paris. The most significant change in the 2023 version: for the first time, the principles include a section dedicated to sustainability and resilience, integrating climate and other ESG risks into corporate governance.

2002: the Sarbanes-Oxley Act (USA)

The collapse of Enron (2001) and WorldCom (2002) forced the US Congress to pass the Sarbanes-Oxley Act (SOX), the law that makes CEOs and CFOs of US-listed companies personally and criminally liable for the accuracy of their financial statements. SOX was the first law to turn governance from a best-practice recommendation into a legal obligation, and it redefined internal control standards worldwide.

2021: ISO 37000, the first global governance standard

In September 2021 ISO published ISO 37000:2021 Governance of organizations. Guidance, the result of the work of Technical Committee 309. It is the first international standard on governance applicable to every type of organisation (public, private, non-profit, of any size). It distils governance into 11 core principles: one primary principle (purpose), four foundational principles and six enabling principles. Source: ISO.org, standard entry 65036.

2020 (Italy): Borsa Italiana’s new Corporate Governance Code

On 31 January 2020 the Corporate Governance Committee chaired by Patrizia Grieco (made up of representatives of ABI, ANIA, Assogestioni, Assonime, Borsa Italiana and Confindustria) approved the new Corporate Governance Code, replacing the previous 2018 Code of Self-Regulation. The changes follow four lines: sustainability, engagement, proportionality, simplification. The Code explicitly introduces the principle of “sustainable success” as the ultimate aim of the board’s action: no longer just creating value for shareholders, but long-term value for all stakeholders. Source: Borsa Italiana, Corporate Governance Code, January 2020.

2022 and beyond: the ESG era and the AI Act

Between 2022 and 2026, European governance is entering a new phase, dominated by two regulatory forces:

1. the Corporate Sustainability Reporting Directive (CSRD, EU Directive 2022/2464), transposed in Italy by Legislative Decree 125/2024, which extends sustainability reporting (and therefore ESG governance) to around 50,000 European companies;

1. the EU AI Act, the world’s first regulation on artificial intelligence, which requires companies that develop or use high-risk AI systems to put in place specific AI governance (risk assessment, human oversight, transparency, accountability).

The result: governance in 2026 is no longer merely “corporate”. It is multi-level, multi-disciplinary and multi-stakeholder. That is precisely why it needed redefining.

3. The six types of governance every board should know

Talking about “governance” without specifying which governance is meant is the main cause of terminological confusion. Here is the working taxonomy we use at Bliss.

3.1 Corporate governance

It is the mother of all governance: it governs the relationship between a company’s ownership, board and management. It covers appointments, delegated powers, board committees, remuneration, the internal control system and shareholder rights. In Italy it is regulated by the Civil Code (Articles 2380 et seq.), the TUF (Consolidated Law on Finance), the Consob Regulation and, for listed companies, the Borsa Italiana Corporate Governance Code.

3.2 IT governance

A subset of corporate governance applied to information technology. Gartner defines it as “the processes that ensure the effective and efficient use of IT in enabling an organisation to achieve its goals“. The reference frameworks are COBIT (ISACA), ITIL and the ISO/IEC 38500 standard. It answers questions such as: who decides on IT investment? Who is responsible for cybersecurity? How is the return on digital projects measured?

3.3 Data governance

The discipline that governs data lifecycle management within a company: who owns data, who uses it, who modifies it, who deletes it, with which metadata and to which quality standards. It became critical with the arrival of the GDPR (EU Regulation 2016/679) and even more so with AI: without data governance, any artificial intelligence project is built on sand. The international reference framework is DAMA-DMBOK.

3.4 AI governance

The newest frontier. It concerns governing the entire life cycle of artificial intelligence systems within an organisation: from model selection to training, from validation to monitoring in production. The EU AI Act (EU Regulation 2024/1689), fully applicable from 2026, imposes specific governance obligations on high-risk systems. The reference standard is ISO/IEC 42001:2023 AI Management Systems.

3.5 ESG governance (sustainability governance)

The “G” in ESG stands for governance, but the term ESG governance now has a more specific meaning: the system through which a company integrates environmental, social and governance factors into its strategic decisions and reporting. In Italy, following the transposition of the CSRD through Legislative Decree 125/2024, large companies (and, progressively, listed SMEs) must publish a sustainability report in line with the European Sustainability Reporting Standards (ESRS) developed by EFRAG. The framework introduces the principle of double materiality: every company must report both on how it impacts the environment and society, and on how ESG factors impact its own financial performance.

3.6 Brand governance

The least regulated area, yet an increasingly strategic one. Brand governance is the system of rules, processes and roles that oversees the consistent management of brand value over time: visual identity, tone of voice, brand architecture, management of extensions, reputation protection, and alignment between brand strategy and business strategy. It is the area that we at Bliss Agency consider crucial for companies in the premium and high-ticket segment, where the brand accounts for up to 30% of market capitalisation (source: Interbrand and Brand Finance studies). The distinction becomes particularly important when the day-to-day management of the brand is separated from the system that sets rules and responsibilities: this is where the difference between Brand Management and Brand Governance comes into play. Without brand governance, marketing fragments across agencies, the message disperses and premium pricing cannot hold.

4. The three corporate governance models provided for in Italy

Following the 2003 company law reform (Legislative Decree 6/2003) and subsequent amendments, Italian law provides for three alternative models of corporate governance for S.p.A. companies. Choosing one is no formal detail: it changes who controls whom.

Traditional (Latin) model

It is the default model and the most widespread in Italy. It provides for:

- Shareholders’ meeting, which appoints;

- Board of Directors or Sole Director, which directs;

- Board of Statutory Auditors, which oversees the lawfulness and propriety of management;

- Statutory audit entrusted to an external auditor or audit firm.

Advantages: tradition, simplicity, and a control body (the Board of Statutory Auditors) that is internal yet autonomous. Disadvantages: possible overlap of functions and, as the Parmalat case showed, fragility in the presence of a dominant controlling shareholder.

Monistic (one-tier) model

Of Anglo-Saxon origin. It provides for:

- Shareholders’ meeting, which appoints;

- Board of Directors (CdA), which directs the company and includes a Management Control Committee made up of independent directors that performs the functions of the Board of Statutory Auditors.

Advantages: speed of decision-making, lower costs, integration between management and control. Disadvantages: less distance between those who control and those who are controlled.

Two-tier model

Of German origin. It provides for:

- Shareholders’ meeting, which appoints the Supervisory Board;

- Supervisory Board, which appoints the Management Board and oversees its work;

- Management Board, which directs.

Advantages: maximum separation between ownership and management, ideal for complex groups and public companies. Disadvantages: complexity, slowness, higher costs. Used in Italy by large groups such as Intesa Sanpaolo (until 2016), UBI Banca (until 2019) and Unipol. The 2020 Corporate Governance Code, as clarified by the Committee chaired by Patrizia Grieco, was designed to be model-neutral: its recommendations apply to all three models, including to foreign companies listed in Italy.

5. International governance principles: OECD 2023 + ISO 37000

For unlisted Italian companies (the vast majority), following the two international frameworks, OECD and ISO, is the most rigorous way to build solid governance without being bound by the Borsa Italiana Code.

The six pillars of the 2023 OECD Principles

1. Institutional, legal and regulatory framework: governance must be anchored in a clear, consistent and enforceable regulatory framework.

1. Shareholders’ rights and equitable treatment: including the right to timely and accurate information.

1. Institutional investors, capital markets and other intermediaries: the central role of institutional investors in active stewardship.

1. Disclosure and transparency: high-quality, timely and accurate financial and non-financial reporting.

1. Board responsibilities: the board steers strategy, oversees management and ensures an effective internal control system.

1. Sustainability and resilience: integrated into the principles for the first time in 2023. Companies must identify and manage material risks related to sustainability and climate.

The 11 principles of ISO 37000:2021

The standard distils good governance into 11 principles arranged on three levels: Primary principle:

1. Purpose: the organisation has a clear, shared reason for existing.

Core principles:

- Value generation;

- Strategy;

- Oversight (supervision);

- Accountability.

Enabling principles:

- Stakeholder engagement (involving stakeholders);

- Leadership (responsible leadership);

- Data and decisions (data-driven decision-making);

- Risk governance;

- Social responsibility;

- Viability and performance over time (long-term sustainability).

ISO 37000 is not certifiable (it is guidance, not a requirement standard), but it is becoming the de facto benchmark for boards seeking to demonstrate their governance maturity, particularly in dealings with institutional investors, banks and major clients that carry out vendor due diligence.

6. Governance and value creation: what the data say

The question every pragmatic board asks is: does good governance pay? The data say yes, and measurably so. The OECD Corporate Governance Factbook 2023, which surveys 49 jurisdictions worldwide, shows that:

- in 2023-2024, almost two thirds of the jurisdictions reviewed amended their company law or capital markets law;

- more than one third updated their national corporate governance code;

- more than two thirds revised their codes over the five years 2020-2024.

This figure says something precise: regulators worldwide are raising the bar on governance, because it correlates empirically with greater stability of the financial system, a lower cost of capital for companies and greater investor confidence. At company level, recurring evidence documented in academic studies (Wiley Corporate Governance: An International Review, Journal of Finance, Harvard Business Review) indicates that companies with robust governance tend to have:

- lower cost of capital (investors demand a smaller premium for the risk of mismanagement);

- higher valuation multiples in the event of a listing or sale;

- greater resilience during systemic crises (Lehman 2008, Covid 2020);

- lower likelihood of scandals and the resulting losses in market capitalisation;

- greater ability to attract talent at senior level.

In Italy, the Assonime Report on the application of the Corporate Governance Code (published annually) documents the steady maturing of listed companies on director independence, gender diversity, board committees and succession plans.

7. Case study: what the Parmalat case taught us

No discussion of governance in Italy can avoid the most studied and cited case in Italian and international universities: Parmalat, December 2003.

The facts

Parmalat, founded by Calisto Tanzi in 1961 in Collecchio (Parma), became one of Europe’s leading dairy and food players in the 1980s and 1990s, listing on the Stock Exchange in 1990. In December 2003 it emerged that a €3.9 billion account held at Bank of America Cayman by its subsidiary Bonlat did not exist. The bank document was forged. The total financial hole would later be estimated at around €14 billion: the largest collapse in Italian industrial history and one of the largest in the world.

Where governance failed

The most frequently cited academic analysis on the subject, Andrea Melis (2005), “Corporate Governance Failures: to what extent is Parmalat a particularly Italian Case?”, published in Corporate Governance: An International Review (Wiley), identifies the weaknesses in Parmalat’s governance that made the fraud possible:

1. Extreme ownership concentration: the Tanzi family effectively controlled the company through chains of shareholdings;

1. Board not genuinely independent: the formally independent directors lacked the strength to challenge the blockholder;

1. Ineffective Board of Statutory Auditors: despite a 2002 complaint by a minority shareholder (Hermes Focus Asset Management Europe) regarding related-party transactions, the Board replied that “no irregularity had been found, either in fact or in law“;

1. Flawed external audit: the successive audit firms (Grant Thornton, Deloitte) failed to detect the fraud;

1. Unmanaged conflicts of interest: opaque relationships with investment banks, rating agencies and financial intermediaries.

The regulatory consequences

The Parmalat case had a structural impact on Italian governance. Its consequences included:

- Law 262/2005 “on the protection of savings”, which introduced the manager responsible for preparing the company’s financial reports and strengthened Consob’s powers;

- the acceleration of the Self-Regulatory Code (now the Corporate Governance Code) and of independence requirements;

- renewed international attention to the Italian system of the controlling minority, which remains distinctive compared with the Anglo-Saxon public company model.

The lesson

Parmalat shows that governance is not a formal compliance exercise but an architecture of constructive tensions between corporate bodies. When a single party (even legitimately) controls ownership, the board and information flows, and the control bodies lack the strength to challenge it, the system inevitably produces the illusion of control, not control. And that is the only real difference between governance that works and governance that exists only on paper.

8. Governance and the CSRD: the regulatory revolution under way

From 2024 onwards, Italian governance has been undergoing its most profound transformation in twenty years. The cause is the Corporate Sustainability Reporting Directive (CSRD, EU Directive 2022/2464), transposed into Italian law by Legislative Decree No. 125 of 6 September 2024.

What changes

The CSRD replaces the previous Non Financial Reporting Directive (NFRD) and drastically widens its scope:

- from 2025 (financial year 2024): large public-interest entities already subject to the NFRD (listed companies, banks and insurers with more than 500 employees);

- from 2026 (2025 financial year): large unlisted companies exceeding at least two of the three thresholds (total assets of 25 million euro, revenue of 50 million euro, an average of 250 employees);

- from 2028 (financial year 2027, postponed from the original plan as a result of the Omnibus I package approved in 2025): listed SMEs, with the option to opt out until 2029.

Double materiality: the conceptual shift

The core principle introduced by the European Sustainability Reporting Standards (ESRS) is double materiality. Companies must report on:

1. Impact materiality: how the company impacts the environment and society (inside-out);

1. Financial materiality: how ESG factors affect the company’s financial performance (outside-in).

This means that ESG governance is no longer a task for the sustainability department: it becomes a direct responsibility of the board and the CFO, because ESG reporting is subject to mandatory assurance (external audit) and because it directly affects the cost of capital, relationships with banks and investors, and solvency.

The knock-on effect on SMEs

SMEs not directly subject to the CSRD will also be drawn in de facto through the “trickle-down effect”: large companies ask their suppliers for reliable ESG data so that they can report on their own value chain. In Italy, the MEF’s Sustainable Finance Working Group and the National Council of Chartered Accountants have published specific guidelines to support SMEs through this transition (CNDCEC, Sostenibilità, governance e finanza dell’impresa, 2024-2025).

9. AI governance: the 2026 frontier

Regulation (EU) 2024/1689 (EU AI Act), fully applicable from 2026, is the world’s first comprehensive regulatory framework on artificial intelligence. It classifies AI systems into four risk levels (unacceptable, high, limited, minimal) and imposes on companies that develop or use high-risk systems a set of obligations that reshape governance:

- Risk management system throughout the model’s entire life cycle;

- Specific data governance for training, validation and test datasets;

- Detailed, traceable technical documentation;

- Transparency towards users and authorities;

- Effective human oversight of automated decisions;

- Quality management system under ISO/IEC 42001:2023.

For boards this means one precise thing: AI is no longer an issue that can be delegated to the CIO. It is a matter for the Board of Directors, exactly as cybersecurity became after NIS2 and DORA.

10. Brand governance: the level at which Bliss Agency operates

Of the six types of governance, brand governance is the least regulated and, precisely for that reason, the most neglected. Yet in sectors where the brand accounts for between 20% and 30% of market capitalisation (consumer, luxury, hospitality, premium B2B), weak brand governance produces measurable financial losses.

What brand governance does

1. Defines the brand architecture (monobranding, branded house, house of brands, endorsed brand) in line with the business strategy;

1. Sets the rules for extending the brand to new products, markets and target audiences;

1. Codifies identity standards (visual, verbal, experiential) into brand guidelines that agencies, partners and distributors can apply;

1. Protects reputational capital by setting crisis management procedures, active reputation monitoring, and vetting of partnerships and endorsements;

1. Aligns the CMO, CFO and CEO on the economic value of the brand (brand equity) as a financial asset, not a cost item.

None of these five tasks is purely a matter of communication. They concern the architecture of decisions, the definition of delegated authority and the criteria by which investments are assessed, matters that fall within the scope of management consulting even before that of marketing. That is why brand governance built without the involvement of general management remains a document and never becomes a system.

Why you need a dedicated governance partner

At Bliss Agency we have structured brand governance as a dedicated service for premium and high-ticket companies for a specific reason: in organisations with turnover above 10 million euros, brand governance, unless overseen at strategic level, is eroded by dozens of everyday operational micro-decisions (an off-tone social post, an opportunistic partnership, an inconsistent product extension, a strapline changed for no reason). The result, a few years on, is a brand that has lost its premium price without anyone knowing exactly when. The framework we use (Audit, Consulting, Advisory, Growth) embeds brand governance in the board’s decision-making flows: it is overseen not by the marketing manager but directly by top management, with an external advisor acting as the neutral custodian of consistency over time.

11. The most common governance mistakes in Italian SMEs

From our work with companies in the premium segment, we have identified seven recurring mistakes that prevent Italian SMEs from building effective governance.

1. Confusing governance with the organisation chart. The organisation chart says who reports to whom. Governance says who decides what, with what information, and accountable to whom. They are two different levels.

1. Confusing governance with compliance. Compliance is adherence to the rules. Governance is the system that makes good decisions possible. A company can be compliant and badly governed (the Parmalat case). It can also govern well beyond compliance.

1. The “family” board. In family-owned SMEs, the board is often made up of family members only. Without independent directors, there is no external sparring partner, and the board loses its primary function: challenging the chief executive.

1. No board committees. Even in unlisted companies, committees (control and risk, remuneration, nominations) are tools that give structure to decision-making. Without them, everything is discussed at board level, and nothing is examined in real depth.

1. Board meetings as rubber stamps. If the board meets only to ratify decisions already taken elsewhere, it is not practising governance: it is putting on a show. The tell is the average length of meetings and the quality of debate.

1. No induction for new directors. A new director needs months to understand the company. Without a structured onboarding programme, they will vote on matters they have not mastered.

1. No succession plan. The 2020 Corporate Governance Code explicitly recommends succession plans for executive directors. Most Italian SMEs do not have one. The day the founder steps down, the company discovers it is defenceless.

12. FAQ. The most frequently asked questions about governance

What is governance, in a nutshell?

Governance is the system of rules, roles, processes and control mechanisms through which an organisation is directed and controlled. It defines who makes strategic decisions, by which criteria, with what information and accountable to whom. It is not a department, nor a document: it is the company’s decision-making architecture.

What is the difference between governance and management?

Management runs day-to-day operations (it executes). Governance oversees strategic direction and control (it directs and supervises). Management answers to governance; governance answers to shareholders and, more broadly, to stakeholders. In an SME the two may sit with the same people, but they are distinct roles that must be kept conceptually separate.

What is the difference between governance and compliance?

Compliance is adherence to laws and regulations. Governance is the decision-making system that, among other things, also produces compliance. A company can be compliant without having good governance (Parmalat was formally compliant). Solid governance produces compliance as a natural effect, as well as creating value.

What is corporate governance?

Corporate governance is governance applied to limited companies. It governs relations between shareholders, board and management. In Italy it is regulated by the Civil Code, the TUF, Consob regulations and, for listed companies, the Borsa Italiana Corporate Governance Code approved in 2020.

Which corporate governance models exist in Italy?

Three: traditional (board of directors plus Board of Statutory Auditors), one-tier (board with an internal audit committee, the Anglo-Saxon model) and two-tier (a Supervisory Board that appoints the Management Board, the German model). Most Italian companies adopt the traditional model.

What are the OECD principles of corporate governance?

They are the international reference benchmark, first published in 1999 and updated in 2023. They address six areas: institutional framework, shareholder rights, institutional investors, disclosure, board responsibilities and (since 2023) sustainability and resilience. They form part of the Financial Stability Board’s Key Standards for Sound Financial Systems.

What is ISO 37000?

It is the first international governance standard, published in 2021 (ISO 37000:2021 Governance of organizations. Guidance). It applies to every type of organisation and distils good governance into 11 principles. It is not certifiable, but it is the de facto benchmark for demonstrating governance maturity to investors, banks and major clients.

What is IT governance?

It is the subset of governance applied to information technology. It defines who decides on IT investments, who is responsible for cybersecurity and how the value generated by digital is measured. The reference frameworks are COBIT, ITIL and ISO/IEC 38500.

What is ESG governance?

It is the system through which a company integrates environmental, social and governance factors into its strategic decisions and reporting. In Italy, following Legislative Decree 125/2024 transposing the CSRD, large companies must publish a sustainability report under the ESRS standards, applying the double materiality principle, with mandatory assurance.

What is brand governance?

It is the system of rules and roles that ensures brand value is managed consistently over time. It defines brand architecture, extension rules, identity standards and reputation management. In premium sectors it can safeguard up to 30% of market capitalisation, because that is how much the brand accounts for in enterprise value.

How much does it cost to put good governance in place in an SME?

It depends on size and complexity. Typical items include: fees for independent directors (typically 10,000 to 50,000 euros a year per seat), an Advisory Board if required (5,000 to 30,000 euros a year per advisor), advisory services to design the internal control system, governance and GRC software, and board training. The investment pays for itself through cost of capital, valuation multiples, crisis prevention and the ability to attract investors.

Who is responsible for governance in a company?

Formally, the Board of Directors and, where applicable, the control bodies (Board of Statutory Auditors, Supervisory Board). In substance, every level of the company has its own governance responsibility: the Board oversees the strategic level, management the operational level, and the control functions (internal audit, compliance, risk management) the oversight level.

13. Conclusions: governance as a value multiplier

If you have read this far, you will have realised that governance is not a chapter in a company law textbook. It is the discipline that decides whether your company will still exist in ten years’ time, and what it will be worth. Companies that treat it as a formal compliance exercise end up in the crisis textbooks (Parmalat, Enron, WorldCom, Wirecard). Companies that treat it as strategic architecture end up in the success textbooks (third- and fourth-generation Italian family multinationals, public companies that come through crises without losing value). There is only one difference between these two categories: in the first, someone had the power to know and chose not to look. In the second, the system forces even those who would rather avoid it to look. At Bliss Agency, governance is the discipline on which we build our Advisory to the boards of premium companies. We do not treat it as compliance, but as an architecture of value. Our specialism, brand governance, is only the point of entry: once a brand is overseen as a financial asset, the board’s entire decision-making system realigns around long-term criteria. This is how we help owners and CEOs build companies that, ten years from now, will be worth far more than they are today. And the first step, always, is the one you have just taken: to stop using “governance” as if it were a single word.

Sources cited

- OECD (2023), G20/OECD Principles of Corporate Governance 2023, OECD Publishing, Paris, https://doi.org/10.1787/ed750b30-en

- OECD (2023), OECD Corporate Governance Factbook 2023, OECD Publishing, Paris

- OECD (2025), OECD Corporate Governance Factbook 2025

- Cadbury Committee (1992), Financial Aspects of Corporate Governance (Cadbury Report), London Stock Exchange

- ISO (2021), ISO 37000:2021 Governance of organizations. Guidance, ISO Geneva, entry 65036

- ISO/IEC (2023), 42001:2023 AI Management Systems

- Borsa Italiana (2020), Codice di Corporate Governance, Corporate Governance Committee chaired by Patrizia Grieco

- Sarbanes-Oxley Act of 2002, U.S. Congress

- European Union, Corporate Sustainability Reporting Directive (CSRD), EU Directive 2022/2464

- Italy, Legislative Decree No. 125 of 6 September 2024, transposing the CSRD

- European Union, EU AI Act, Regulation (EU) 2024/1689

- Andrea Melis (2005), Corporate Governance Failures: to what extent is Parmalat a particularly Italian Case?, in Corporate Governance: An International Review, Wiley

- Treccani, entry governance (dictionary and encyclopaedia, Dizionario di Economia e Finanza edited by Silvia Giacomelli); entry corporate governance

- Gartner, definition of IT Governance

- Consiglio Nazionale dei Dottori Commercialisti (2024-2025), Sostenibilità, governance e finanza dell’impresa

- Assonime, Report on the application of the Corporate Governance Code

- EFRAG, European Sustainability Reporting Standards (ESRS)

Scritto il 3 October 2026

Governance: what it is, models, regulation and why it defines a company’s value