Italian companies: with the excuse of Covid-19, the government authorizes them to hold shareholder meetings behind closed doors

The following article is taken from the ReCommon website, an association that fights against the abuse of power and the looting of territories to create spaces for transformation in society, in Italy, in Europe and in the world, in the deep conviction that people come first of profit

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ROME – ReCommon, ISDE Italy, Greenpeace Italy, The Good Lobby And Ethical Finance Foundation strongly criticize the government’s decision to allow the main Italian companies to hold their shareholders’ meetings behind closed doors for the fourth consecutive year, according to the procedures for the prevention of the spread of Covid-19 which are no longer in force, having concluded the phase pandemic emergency. This umpteenth blow to democratic participation and transparency is the result of the amendment to the so-called Milleproroghe Decree (number 198 of 12/29/2022, definitively approved on 23 February) which reiterates the provisions contained in the “Cura Italia” Decree Law of 17/03/2020, which offered the joint-stock company the possibility of allowing the participation and exercise of the vote of the shareholders by means of telecommunications, also in derogation of various statutory provisions. The text mentions the “possibility of foreseeing” these alternative methods to face-to-face participation, which is still guaranteed or mediated today by means of telecommunications.

Excluded from any form of participation. However, after the Cura Italia Decree was converted into law – which took place on 24 April 2020 – and the subsequent extensions, between 2020 and 2022 the main Italian companies listed on the Stock Exchange – including the large industrial and financial groups – decided to follow the “closed doors” line, also precluding the possibility of taking part in it through the means of telecommunications. This has led to a total lack of dialogue between the shareholders and the directors of the companies, to the detriment of participation.

The Covid excuse still standing. The “closed doors” amendment introduced in the latest Milleproroghe Decree is No. 3.300, presented by Massimo Garavaglia (Lega), a parliamentarian who in December 2021 stated his opposition to possible closures to counter the resurgence of the pandemic situation and hoped ” a month without talking about Covid”, and who now instead wants to bar the assembly doors of the Italian giants precisely because of the health risk associated with the onset of the Covid-19 epidemic. In a context in which the virus continues to circulate but the most acute – as well as emergency – phase has long passed, it is legitimate to question the interests protected by this amendment.

The restriction of democratic spaces. Because of this ReCommon, ISDE Italia, Greenpeace Italia, The Good Lobby and Fondazione Finanza Etica denounce the further restriction of democratic spaces regarding the possibility of counteracting the work of Italian industrial and financial groups. They also ask them not to abuse the provisions of the Milleproroghe Decree Law and to allow attendance in the respective shareholders’ meetings or, as a last resort, participation via telecommunication means comparable to that in attendance. Ultimately, the organizations are urging government and regulators to take action to protect shareholder rights so that such restrictions do not occur again in the future.

Critical shareholding and possible comparisons. As demonstrated in recent years by the critical shareholding promoted by civil society organizations, shareholders’ meetings offer the opportunity to openly confront the management of companies and ask for reasons for their work in relation to the environment, climate and human rights. A mechanism that is certainly partial and limited, but which seeks to remedy the total lack of accountability of industrial and financial groups – Intesa Sanpaolo and UniCredit in the first place – given the silence of governments, which in some cases, for example in Italy, are also shareholders of the companies themselves, as in the case of Eni, Enel and Snam.

The effects of the new “Milleproroghe”. With the recent approval of the Milleproroghe, even more than in the past, the meetings risk revolving around only two topics: the renewal of the Board of Directors and the detachment of the coupon, i.e. the dividend paid to the shareholders. These forums thus represent the abysmal distance that exists between the Italian giants and the ‘real country’, with the needs of people who find no other space than to undergo decisions made elsewhere. Just think of the mega-share buyback program promoted by Eni to further increase the future dividend of shareholders, while energy poverty is rampant in Italy. This theme or the requests of the territories impacted by the conduct of energy multinationals or by the financing of large credit institutions will not be able to be discussed during the closed-door meetings.

The intent to abolish critical shareholding. Looking ahead, the situation could be even more critical, reading the words of Luciano Acciari, coordinator of the Forum of Board secretaries and member of Leonardo’s management. In fact, it seems that there is an intention to decree the end of critical shareholdings – which have been growing in Italy in recent years, allowing “live intervention only to shareholders with a minimally significant share package, which cuts out the “disturbers” in search of visibility or other interests”. Even the online newspaper Italia Informa has strongly denounced this dangerous drift, speaking of “democracy in pieces”. An authoritative voice, if one considers that the Scientific Committee of the newspaper is made up of members of those same companies which, between 2020 and 2022, chose the hard line of meetings behind closed doors, an evident symptom of strong dissent within the themselves.