Because the Savona Consob is a little disappointing in Caltagirone on Generali
What Consob has decided on the Generali case. Facts, comments and insights
"Substantial green light of Consob to the lists of the board of directors", writes Repubblica . “The Consob board has decided not to decide on Generali”, writes Il Sole 24 Ore instead.
So what has Consob, chaired by Paolo Savona, really decided on the list of the board of Generali in view of the next shareholders' meeting of the Trieste giant?
“Wide transparency and documentability of the candidate selection process also through adequate minutes of the board meetings”, enhancement of the role of independent directors and particular attention to the risk of links with other lists.
These are the main guidelines indicated by Consob in the hypothesis of drawing attention to companies and shareholders on the possibility of presenting a slate for the renewal of the board of directors by the outgoing board, subject to market consultation until December 17.
Consob has identified some guidelines to regulate the phenomenon of "board lists", a practice not provided for by the law – and therefore not prohibited – which has taken hold so much that it is envisaged in the statutes of 52 companies, with 11 that the have applied and Generali which is about to launch it, summarizes the Corriere della Sera.
Yesterday the board met and voted by majority (not unanimously) the choice of calling a market consultation on the risks associated with the presentation of a list by the outgoing board of a company, as is happening at Generali.
In fact, the choice of the Authority expands the timing of the confrontation, does not reject the list of the council in itself but at the same time places some stakes in the elaboration process, points out the Sole 24 Ore instead.
The issue has taken on particular relevance in the last few weeks following the request by Francesco Gaetano Caltagirone to Consob to express its opinion on the list presented by the outgoing board of Generali and supported by Mediobanca.
The warning drawn up by Consob is however addressed to the entire market, while Caltagirone's question will be answered in another ad hoc document, emphasizes the Radiocor agency.
The crux, in essence, is the reconfirmation or not of the head of Generali, Philippe Donnet, whom Caltagirone and Del Vecchio do not want to confirm while the first shareholder of the insurance group, Mediobanca, yes. And the opposition of the two entrepreneurs is now known also and above all within the Milanese institute headed by Alberto Nagel.
The Commission that monitors the stock exchange and listed companies highlights that a board list, "in addition to self-referential and self-perpetuating risks, may present some risks, more evident in concentrated ownership companies and especially in the presence of controlling shareholders", such as " lack of transparency in the process of selecting candidates and drawing up the list ".
Consob invites listed companies to comply with three requirements: that the procedure for the list is "transparent", with a known ex ante procedure and minutes of meetings (which Generali has adopted).
The second issue concerns the enhancement of independent directors in the list committee: they must be "well represented" and their independence must be verified before work on the list is started. To avoid links between lists,
finally, the directors representing a shareholder must avoid participating in the work for the "board of directors list" and the shareholder or his managers must not be part of the board list, if the shareholder also presents his own list.
However, since it is a "call for attention" and not a binding Regulation, Consob limits itself to emphasizing that "it is appropriate to reflect" on behaviors that can then lead to the belief that there are links between two lists. It being understood that the outgoing board must initiate, at the beginning of the process, an interview with the shareholders, to understand their orientations (and therefore avoid the risks of self-referentiality).
The Commission also underlines the importance of presenting the list of the outgoing board of directors well in advance, before the legal limits. The stakes will apply to everyone; but the similarities between the Consob draft and the procedure prepared by Generali do not seem random, also because discussions have been underway between the authority and the Trieste company for months.
JP Morgan and the General Grilli of Del Vecchio and Caltagirone
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-la-consob-di-savona-delude-caltagirone-su-generali/ on Fri, 03 Dec 2021 08:23:15 +0000.