The effects of ownership, board size and board composition on the performance of Italian water utilities

This article analyses the effects of ownership, board size and composition on the performance of 72 Italian water utilities. Information about the utilities' 335 directors was collected. Our main findings indicate that private or mixed-ownership utilities show higher profitability than entirely publicly-owned firms, even if the latter are less debt-dependent. Furthermore, our results show that the boards of Italian water utilities are dominated by politically connected directors, who boost access to debt and negatively affect the firms' capital structures. This study also shows that board composition, in terms of the age and educational background of members, influences economic performance, since graduate and senior directors exert a negative influence on profitability.