2021 Report on corporate governance - CONSOB AND ITS ACTIVITIES
The Report on corporate governance of Italian listed companies provides evidence on ownership, corporate boards, annual general meetings and related party transactions, on the basis of data obtained from supervisory statistical reports and information disclosed by listed companies.
The 2021 Report examines for the first time directors' sustainability and digitization skills for medium and large-sized companies.
|Ownership and control structure
The ownership concentration of Italian listed companies has slightly fallen over time, as shown by the share of the largest shareholder, averaging 47.6% in 2020 vs 48.7% in 1998. ... more
|In line with previous years, families continue to be the main ultimate controlling agent (in 64% of listed companies), while the State and other local authorities are the main shareholder in about one in ten companies.
At the end of 2020 the presence of institutional investors in the major shareholders of Italian listed companies, although slightly declining compared to the previous year, remains more widespread in comparison with the long-term figure for foreign subjects (participating in 50 firms compared to 36 in 2011), and for the first time over the last decade records an increase for Italian investors (18 companies).
As for the separation between ownership and control, data confirm the progressive reduction in the intensity of the phenomenon. Loyalty shares are becoming increasingly widespread: at the end of 2020, they are envisaged in the bylaws of 64 issuers, representing just over 17% of the total market value, while being active in 40 firms.
|Corporate boards and board diversity
The governance of Italian listed companies continues to be characterized by the prevalence of the traditional management and control model. ... more
|Boards of Directors (BoD), which are steadily made up of around ten members, show some changes in the number of independent and minority members.
The percentage of companies carrying out the annual self-assessment remains overall stable, while an increasing number of firms adopt the succession plan.
On average, nearly 2 directors in every board hold a directorship in other listed companies (interlockers).
The boards of statutory auditors of the Italian listed companies count on average just over 3 standing members, a stable figure over time; firms with at least one minority auditor represent 59% of the total.
At the end of 2020, corporate board directors are aged on average 57 years, foreigners in 5.5% of the cases, hold a first degree in more than 89% of the cases and have a managerial background in about 66% of the cases. Statutory auditors are aged on average 56 years, are foreigners in less than 1% of the cases, hold a first degree in 96% of the cases and are predominantly a consultant/professional (85%).
Over time, the diversity of corporate boards also reflects the increase in the presence of women, due to the application of the provisions on gender quotas. Boards of directors show a slight reduction on average of members' age, an increase in the level of education and a greater diversification of professional profiles. The impact of gender quotas on the diversity of the boards of statutory auditors' members is less marked.
The remuneration committee and control and risk committee remain the most widespread, while the number of issuers establishing the nomination committee and the sustainability committee continues to grow.
On average, committees are mainly composed of independent directors and women in more than half of the cases. The professional background of committee members is more diverse than that of the whole board, due to a less pronounced presence of the managerial profile.
|Sustainability and digital skills of directors
tIn consideration of the structural developments related to sustainability and digital transformation and of their impacts on corporate business and strategy, directors' specific skills are investigated for medium and large-sized companies (i.e. companies belonging to the Ftse Mib, Mid Cap and Star indices). ... more
|Directors with sustainability skills hold 14.6% of total positions; the figure is higher among larger companies and female directors. Directors with digital skills hold 16% of overall positions; this figure is substantially stable across company sizes, although higher among women. The percentage of firms where at least one board member has either sustainability or digital skills is equal respectively to 72% and 74%, while 28% of companies show at least one director with both skills.
Women representation on corporate boards of listed companies has reached an all-time high in the Italian market (41% of appointments), as a result of the rules on gender quota (Law no. 120/2011 and Law no. 160/2019). ... more
|At the end of 2021, the boards of the 131 companies that have applied the two-fifths gender quota envisaged by the Law no. 160/2019 count on average 4 women (almost 44% of the total members), while in the remaining firms the female presence is only marginally lower. In line with recent years, the number of cases in which women hold the role of CEO or chairman of the board of directors remains limited, while the role of independent director is more widespread. Women hold more than one directorship (interlocker) in 30% of cases, a figure that is down from the previous year and the maximum reached in 2019 (34.9%).
|Annual general meetings
In 2021, shareholders' participation in the meetings of the 100 largest listed companies increased compared to the previous year (74.6% of share capital on average, compared to 73.6% in 2020). ... more
|Institutional investors represented on average 22.8% of share capital (22.2% in 2020) and attendance of Italian investment funds, banks and insurance companies slightly increased over the last year (from 1.9% in 2020 to 2.5% in 2021). Italian institutional investors took part in 95 meetings, the highest figure since 2012 (first year of survey), with an average share of 3.6% of the stocks represented at the meeting (3% in 2020).
On average, remuneration policies, subject to binding vote since 2020, were approved by about two-thirds of the share capital and by almost 90% of the share capital represented at the shareholders' meeting.
Institutional investors expressed consent on the remuneration policy with 64.4% of their votes (21.2% of the share capital attending the meeting). Dissent was expressed by slightly above 8% of the share capital (11.1% of the votes at the meeting), most notably by institu¬tional investors (7.1% of the share capital and 9.9% of the votes at the meeting).
The non-binding vote on the remuneration report recorded agreement with companies' compensation practices by 66% of the share capital and 87.7% of AGMs votes. Dissenting votes of institutional investors amounted to about 36% of their votes.
|Related party transactions
Over 2011-2021, material Related party transactions (RPTs) disclosed by Italian listed companies amount to 670 (41 in 2021 and on average 61 per year), mainly by small-sized companies. ... more
|Most material RPTs reported since 2011 entail the transfer of a portion of companies' cash flow, such as financing or other contracts. The related counterparty is in nearly 83% of cases the controlling or major shareholder.
Since 2011, listed firms have entered into 264 material arm's length RPTs in the ordinary course of business (29 in 2021), which were reported to CONSOB. The majority of such transactions, mainly referrable to large firms, are connected with the operating activities of the listed companies and have been entered into with controlling or major shareholders.
The Report was prepared by:
Nadia Linciano (coordinator) - CONSOB, Head of Research Department (firstname.lastname@example.org)
Angela Ciavarella - CONSOB, Corporate Governance Department (email@example.com)
Giovanna Di Stefano - CONSOB, Economic Studies, Research Department (firstname.lastname@example.org)
Rossella Signoretti - CONSOB, Corporate Governance Department (email@example.com)
Lucia Pierantoni - CONSOB, Economic Studies, Research Department (firstname.lastname@example.org)
Eugenia Della Libera - CONSOB, Economic Studies, Research Department (email@example.com)
Elena Frasca - CONSOB, Economic Studies, Research Department (firstname.lastname@example.org)
The opinions expressed in the Report are the authors' personal views and are in no way binding on Consob.
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ISSN 2281-535X [online]