Italy leads the way on board independence in listed companies

Board-shareholder dialogue. Sometimes one has to rethink one's own situation by stepping outside one's own borders. This is what Assogestioni has done, bringing to Oxford University the debate on a topic that is very much felt in Italy as well and which, after work started two years ago in Rome, has turned into a book, which was discussed in recent days at Oxford University. And which bears the title cited at the beginning.

Fabio Galli, Director General of Assogestioni recalls: "The publication of this book with our support is testimony to our established collaborations with centres of academic excellence, practitioners and institutions. The Association is constantly engaged in the development of a dialogue from which reflections and proposals for the improvement of corporate governance practices can derive, and which benefits from the high quality of the Italian debate". The volume presented in Oxford sees the involvement of many authoritative voices on the subject of governance as well as Nobel Prize winner Oliver Hart, an economist who speaks on a purely legal topic.

So while in Italy we are waiting for the text of the Tuf reform and the Consob regulation on the list of the outgoing board of directors, the Italian case arouses interest abroad. 'The interest,' explains Giovanni Strampelli, professor at Bocconi University in Milan, who edited the book with Luca Enriques of Oxford University, 'is due to some Italian peculiarities. Here, in fact, the presence of representatives of minority lists in the board of directors is guaranteed. Beyond the formula, there is an open question a bit everywhere about the independence of directors qualified as such, since abroad they are all appointed by the shareholders, and that is why the Italian experience attracts attention'.

Another element of interest for Strampelli is precisely the presence of an entity such as the Committee of Managers promoted by Assogestioni that coordinates the selection of these minority board members, which allows the entry of large players, who abroad keep out of corporate governance. The presence of the BoD list, even in companies where there are reference shareholders, has also been successful due to the tendency of large international investors to vote for this type of list.

Institutional investor activism above all is now a reality in Italy as well, and flexible solutions are being sought to make it effective. This can also be explained by the fact that the approach of direct engagement with companies has proven to be more fruitful than the traditional approach of exclusions, which makes investors lose their voice in companies where it would be most needed. 'It is appropriate for there to be a figure of reference for contact with institutional investors, but while the CEO remains a figure of reference for business-related issues, for matters such as governance or ESG engagement other board figures can be profitably involved,' Strampelli concludes.