Evolution of governance models and accounting information system. The case of Teatro alla Scala

This study is the fruit of historical research into “Teatro alla Scala” (La Scala Opera House) in Milan. In Italy, the current public financing system means the entertainment industry often has to cope with crisis and social tension. Despite this, there are institutions, like La Scala, that have operated in the performing-arts sector for centuries and attained international recognition. Herein lies the interest in the topic, since theatres – especially smaller ones – might often be in precarious financial situations, but still manage to be international standard bearers for Italy. More specifically, La Scala is seen, in its home country, as setting the benchmark for all other opera houses and this is the main reason for our decision to study it . Historically, opera houses have been characterised by a dichotomy between the artistic concerns, which influence the institutional aims, and the financial concerns. This is, though, an essential condition in order to accomplish the mission established by the charter. Our study initially focused on the evolution of the form, structure and content of the financial statement for this institution and, then, on understanding the possible causes for the changes. In essence, we are seeking to answer the following research question: ‒ “What was the evolution of the accounting information system of La Scala in Milan from 1921 to 1946?” ‒ “What were the key factors?” Today the La Scala Opera House is seen as one of the world’s great opera houses, perhaps even the leading one. It was founded under the auspices of the Empress of Austria following a fire on 25 February 1776 that destroyed the Royal Ducal Theatre, the historic home of the Milanese Opera. The building of the new theatre was funded entirely by the box holders at the Ducal theatre in exchange for owning boxes in the new theatre. The land, which was where the church of Santa Maria alla Scala had stood, was given to the box holders for free by the Ducal Chamber, in virtue of an obligation from 1717. The theatre was inaugurated on 3 August 1778 with Antonio Salieri’s Europa riconosciuta. In 2004, following major restoration work, the new theatre was inaugurated with a performance of Europa riconosciuta, providing a symbolic parallel with the first historic opening in 1778. The Theatre is managed by “Fondazione Teatro alla Scala di Milano”. In 1997 the theatre changed its legal status from Ente Autonomo to Fondazione (foundation) in order to have greater consistency and flexibility in pursuing its mission of promoting musical culture in Italy and around the world. The Founders (by Law, Ordinary and Permanent created a non-profit institution governed by private law, forming what is defined under Law no. 800/1967 as an institute in the national interest. In this paper, we have concentrated our historical research into La Scala on the period from 1921 to 1946. We have looked, on the one hand, at institutional aspects, organisational structures and governance models and, on the other, at the financial statements and accounting practices used in this organisational context (Roberts et al., 1985). Our chosen time period can be further broken down into two sections: • the transformation of La Scala into an Ente Autonomo (1921-1935) • the more hybrid State-Institution reports (1936-1946). The underlying reason for adopting this subdivision is that, from 1921 to 1935, it is possible to trace the transformation and development of the theatre as an Ente Autonomo that had its own, specific legal status. The second period, namely from 1936-1946, is linked to the time when Royal Decree no. 438/1936 was in force, limiting the theatre’s independence in a manner wholly consistent with the Fascists’ totalitarian approach. The consequent changes in the relationship between the State and the institution in these periods necessitated amended accounting tools that could service differing needs for information. In order to answer the research question that underlies this entire paper, we adopted the following structure. After a brief introduction, section two outlines the research strategy we adopted. In the third section, we provide information about the historical context of the two periods covered; this forms the basis for our in-depth study of the institutional and organisational aspects of the theatre. We then get to the heart of the study, or rather, an analysis of the accounting information system from 1921 to 1946. Our paper ends by comparing periods, leading us onto our concluding remarks.