Greater sustainability; a greater culture of governance

Published on Wednesday, 6 December 2017

On November 30 and December 1, Milan’s Palazzo della Borsa (Stock Exchange building) played host to the third Italy Corporate Governance conference. Taking the Italian perspective as a starting point, the event offered the international financial community an opportunity for dialogue on themes relating to corporate management best practices, which are fundamental to creating value and stimulating economic growth.  

On Thursday, the opening day of the event, the Borsa Italiana (Italian Stock Exchange) Chairman Andrea Sironi reminded those present that this is “a crucial year for the Italian capital markets.” His address was followed by a welcome speech from Enel Chairman Patrizia Grieco who, aside from her position with our Group, is also Chairman of the Italian Corporate Governance Committee.

Grieco began by reading a message from Italian Prime Minister Paolo Gentiloni, who sent his greetings and expressed his “appreciation for this important opportunity for dialogue involving the key players in a sector which has growing strategic importance to the Italian economy. They will undoubtedly produce meaningful ideas and reflections.”

“The culture of corporate governance and its standards, which were developed in great part through centralised regulation,” Patrizia Grieco went on to say, “play a fundamental role in establishing best practices for business and in monitoring procedures. As demonstrated by recent studies, better governance produces an improvement in the financial performance of businesses. At the same time, governance is also seen as being of growing importance by investors who are increasingly considering it the key factor when it comes to making their investment choices.”

Grieco was keen to stress that “90% of Italian listed companies claim to adhere to the latest version of the national corporate governance code, and both the quantity and quality of the information they provide is also improving. There is, however, room for further improvement: just half of the listed companies, for instance, have introduced clawback clauses.”

The Chairman also declared that one of the Italian Corporate Governance Committee’s commitments is to “work to boost the role of sustainability: including it in the strategic guidelines for listed companies will improve their competitiveness. In this way, it can become an essential tool in strategic risk management in particular, and in the effectiveness and efficiency of the board in general.” This statement came just after some meaningful words from Sironi: “The elements of sustainable development are playing a growing role in both corporate strategy and entrepreneurs’ evaluations.”

“Today’s conference is a unique opportunity to discuss all of this”, Grieco continued, before moving on to outline the panels on the agenda. These spanned themes the relevance of which “clearly extends beyond our borders and is the reason why we decided to give a markedly international dimension to this event, providing a platform for dialogue consistent with the growing globalisation of the capital markets.”

The first panel focused on flexibility and proportionality in corporate governance policies, while others covered the role of the board and management of conflicting opinions, improving the board’s performance and, most importantly, creating incentives for business to take a more responsible approach. The latter, Grieco stressed, is “an increasingly important theme as investors are focusing to a greater and greater extent on sustainability, while civil society also now has growing expectations of higher moral standards on the part of the business community.”

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