Legality as a cornerstone in competition and development
“Legality is a fundamental principle of competition” and a “basic condition for the proper functioning of the market”. This was the assessment, published on 19 June in Il Sole24Ore, of Paola Severino, the former justice minister of the Monti government and a lawyer that has earned great respect in the realms of both law and business. These important words point to a profound, cultural shift that has been taking place in many segments of the economy for some time now and which is leaving its mark on a new culture of enterprise, one in which there is an ever stronger bond between legality and competitiveness, the desire to invest both domestically and internationally, pride in strong financial performance, and working together as a nation. So legality as a key to development and transparent, well-regulated markets as a dynamic means of selecting the best players and of driving “quality growth”.
Legality as a valuable asset in sustainable growth has been a topic of discussion at Assolombarda for some time now (and a priority issue within the Chairman’s Committee, both when it was led by Alberto Meomartini and now under the guidance of Gianfelice Rocca), connecting the concept with that of culture of enterprise and, above all, with corporate social responsibility, i.e. establishing a company identity and relations with all stakeholders that work towards strong performance, whether it be financial or otherwise, while remaining socially and environmentally sustainable. There has also recently been some discussion about better relations between businesses and the legal system, and so legality and competiveness, the quality of development and of civil life, in the hills of Florence at the Scuola Superiore della Magistratura (Advanced School for Magistrates) in Scandicci as part of the launch of the study programmes for newly appointed magistrates and as part of a meaningful dialogue promoted by the school’s president, Prof. Valerio Onida, between different worlds and with a view to improving the nation’s overall economic culture.
From what perspective are we to look at legality? From, for example, that of the perverse relationship between an excess of laws and regulations and how little they are actually followed (being “a right of the markets and of businesses full of regulations, but virtually free of principles”, as opined by law expert Guido Rossi). Or from that of the corruption business by the mafia and other organised crime found throughout Italy. Or even that of the unfair competition brought about by the “underground economy” and by the continued existence of broad areas of tax evasion. Then there’s the point of view of the limited efficiency and efficacy of the slow, complex legal system, which can no longer meet the needs of civil and criminal justice within a reasonable timeframe or in the form of clear, high-quality rulings. Not to mention that of the poor functioning of the justice system and the crisis on the well-regulated markets giving the advantage to the least scrupulous, most domineering and least lawful players. All of which can only be of detriment to the Italian economy.
An essential reference to the importance of a strategy that unites legality and competitiveness and the economic value of lawfulness can also be found in the annual report of the president of the Italian anti-trust authority, Giuseppe Pitruzzella. Paola Severino said, “If this message is to be heard by the most sensitive and most reactive segments of the economy, and heard not only as an encouragement to act ethically, but as a means of establishing an actual virtuous circle towards business growth, we will be able to make significant inroads towards a model of fair competition.” An organisation that follows the rules is stronger, more suited to competing on more advanced international markets, and more open to a broader array of stakeholders than we are seeing in many Italian settings. To this end, we should probably also further motivate the virtuous enterprises, including through a system of rewards, by introducing a “lawfulness rating” into the “Cresci Italia” (Grow Italy) decree to be used for relations between businesses, banks and government. As Severino explains, “The speed with which the anti-trust authority adopted the executive regulations and the Ministry of Justice, in turn, issued the implementing decree are signs of how important this entity is seen as being in increasing confidence in a healthy economy and in a market that encourages legality and fights the infiltration of organised crime, corruption and other forms of fiscal and corporate crime. Crimes that earn easy money by eating away at the healthy part of the industry and irreparably damaging the image of the nation and its best businesspeople.”
Institutions ready to set up a system of measuring legality and businesses aware of the importance of obtaining a good rating. Severino concludes, “The encouraging number of rating requests received by the authority over a short timespan shows that the mechanism is seen as being helpful by those who have understood that the most damaging thing to Italy’s economy is unfair competition, where it’s not the best that wins, but those who think they’re more clever than the rest, who look for shortcuts and who throw stumbling blocks in the paths of the more virtuous businesses. Only widespread awareness of the scope and irreparability of this harm will be able to provide the defence we need against unlawfulness and bring out those who continue to believe, and to grow, in merit.” In other words, good market culture of enterprise. Legal.
“Legality is a fundamental principle of competition” and a “basic condition for the proper functioning of the market”. This was the assessment, published on 19 June in Il Sole24Ore, of Paola Severino, the former justice minister of the Monti government and a lawyer that has earned great respect in the realms of both law and business. These important words point to a profound, cultural shift that has been taking place in many segments of the economy for some time now and which is leaving its mark on a new culture of enterprise, one in which there is an ever stronger bond between legality and competitiveness, the desire to invest both domestically and internationally, pride in strong financial performance, and working together as a nation. So legality as a key to development and transparent, well-regulated markets as a dynamic means of selecting the best players and of driving “quality growth”.
Legality as a valuable asset in sustainable growth has been a topic of discussion at Assolombarda for some time now (and a priority issue within the Chairman’s Committee, both when it was led by Alberto Meomartini and now under the guidance of Gianfelice Rocca), connecting the concept with that of culture of enterprise and, above all, with corporate social responsibility, i.e. establishing a company identity and relations with all stakeholders that work towards strong performance, whether it be financial or otherwise, while remaining socially and environmentally sustainable. There has also recently been some discussion about better relations between businesses and the legal system, and so legality and competiveness, the quality of development and of civil life, in the hills of Florence at the Scuola Superiore della Magistratura (Advanced School for Magistrates) in Scandicci as part of the launch of the study programmes for newly appointed magistrates and as part of a meaningful dialogue promoted by the school’s president, Prof. Valerio Onida, between different worlds and with a view to improving the nation’s overall economic culture.
From what perspective are we to look at legality? From, for example, that of the perverse relationship between an excess of laws and regulations and how little they are actually followed (being “a right of the markets and of businesses full of regulations, but virtually free of principles”, as opined by law expert Guido Rossi). Or from that of the corruption business by the mafia and other organised crime found throughout Italy. Or even that of the unfair competition brought about by the “underground economy” and by the continued existence of broad areas of tax evasion. Then there’s the point of view of the limited efficiency and efficacy of the slow, complex legal system, which can no longer meet the needs of civil and criminal justice within a reasonable timeframe or in the form of clear, high-quality rulings. Not to mention that of the poor functioning of the justice system and the crisis on the well-regulated markets giving the advantage to the least scrupulous, most domineering and least lawful players. All of which can only be of detriment to the Italian economy.
An essential reference to the importance of a strategy that unites legality and competitiveness and the economic value of lawfulness can also be found in the annual report of the president of the Italian anti-trust authority, Giuseppe Pitruzzella. Paola Severino said, “If this message is to be heard by the most sensitive and most reactive segments of the economy, and heard not only as an encouragement to act ethically, but as a means of establishing an actual virtuous circle towards business growth, we will be able to make significant inroads towards a model of fair competition.” An organisation that follows the rules is stronger, more suited to competing on more advanced international markets, and more open to a broader array of stakeholders than we are seeing in many Italian settings. To this end, we should probably also further motivate the virtuous enterprises, including through a system of rewards, by introducing a “lawfulness rating” into the “Cresci Italia” (Grow Italy) decree to be used for relations between businesses, banks and government. As Severino explains, “The speed with which the anti-trust authority adopted the executive regulations and the Ministry of Justice, in turn, issued the implementing decree are signs of how important this entity is seen as being in increasing confidence in a healthy economy and in a market that encourages legality and fights the infiltration of organised crime, corruption and other forms of fiscal and corporate crime. Crimes that earn easy money by eating away at the healthy part of the industry and irreparably damaging the image of the nation and its best businesspeople.”
Institutions ready to set up a system of measuring legality and businesses aware of the importance of obtaining a good rating. Severino concludes, “The encouraging number of rating requests received by the authority over a short timespan shows that the mechanism is seen as being helpful by those who have understood that the most damaging thing to Italy’s economy is unfair competition, where it’s not the best that wins, but those who think they’re more clever than the rest, who look for shortcuts and who throw stumbling blocks in the paths of the more virtuous businesses. Only widespread awareness of the scope and irreparability of this harm will be able to provide the defence we need against unlawfulness and bring out those who continue to believe, and to grow, in merit.” In other words, good market culture of enterprise. Legal.