Induction and value creation : the Italian case

This study explores the world of Induction programs with a focus on the Italian Case. Induction aims to provide boards’ members with adequate knowledge of fundamental variables of the company and the context in which the firm operates. Although the Self-Regulation Code of Italian listed companies clearly identifies the need of these programs and the most part of the first 100 Italian listed companies comply with this recommendation, the current academic literature is very poor. To fulfill this gap, we investigate how these programs can impact on board effectiveness and on firm performance. We also study if they may have peculiar relevance after the Golfo-Mosca law on gender quota, since the main problem companies are facing right now is a possible lack of women with the previous experience that is usually considered necessary to be appointed in a board. Using a multiple Case Study on five Italian listed companies, we demonstrate that induction programs are a fundamental tool to assure that each director fully contribute with his own Human and Social Capital to the board’s meeting in the shortest possible time, thus guaranteeing a positive impact on the value creation. However these mechanisms are not organized to improve personal knowledge or bridge a gap in previous experiences so they do not have a differential impact on female directors. Instead, to increase future directors’ knowledge, preparation courses, made before the appointment, could be particularly relevant.