Table of Contents:
Introduction to the dialogue between boards and shareholders
In recent years, corporate governance has undergone a significant evolution, shifting attention to a constructive dialogue between boards of directors and shareholders. This change was promoted by Assogestioni, the Italian association of managed savings, which recently presented a fundamental book on the subject. The volume, edited by Professors Luca Enriques and Giovanni Strampelli, analyzes the best practices and policies necessary to promote a fruitful dialogue between
the parties involved.
The role of institutional investors
According to Professor Oliver Hart, Nobel Laureate in Economics, most investments in listed companies are made through institutional investors. Traditionally, these investors have pursued shareholder value maximization, known as Shareholder Value Maximization (SVM). However, Hart stresses that it’s crucial to also consider investors’ extra-financial preferences. To achieve this objective, it proposes two strategies: transferring votes to final investors or setting up shareholder meetings to guide institutional investors in their
vote.
Shareholder Welfare Maximization
Hart suggests replacing SVM with Shareholder Welfare Maximization (SWM), which takes into account shareholder needs and preferences beyond mere profit. This approach aims to create an environment in which companies can thrive in a sustainable way, meeting investor expectations and contributing to the well-being of society as a whole. Carlo Trabattoni, President of Assogestioni, highlighted how the list vote can represent an effective third way to promote SWM, stressing the importance of an open and transparent dialogue between companies and
their shareholders.
The future of corporate governance in Italy
In Italy, awareness of the importance of dialogue between investors and companies is growing. Fabio Galli, General Manager of Assogestioni, said that the volume presented represents a fundamental step towards a more robust stewardship culture. The collaboration between academics and global experts has led to the creation of a work that not only analyzes current challenges, but also offers practical solutions to improve corporate governance. The growing influence of institutional investors requires a more collaborative approach, in which companies not only inform shareholders, but actively involve them
in the decision-making process.
