Shareholders’ Meetings behind closed doors: Italian civil society protests

ReCommon, ISDE Italy, Greenpeace Italy, The Good Lobby and Fondazione Finanza Etica severely criticise the government’s decision to allow major Italian companies to hold their shareholders’ meetings behind closed doors for the fourth year running, in accordance with the procedures for preventing the spread of Covid-19, which are no longer in force as the emergency phase of the pandemic is over.

This umpteenth slap in the face to democratic participation and transparency is the result of the amendment to the so-called “Decreto Milleproroghe” (number 198 of 29/12/2022, approved on 23 February), which reiterates the provisions contained in the “Cura Italia” decree-law of 17/03/2020, which offered joint-stock companies the possibility of allowing shareholders to participate and vote by telecommunications means, even in derogation of various statutory provisions. The text mentions the “possibility of providing for” these alternative modalities to participation in presence, which is in any case still ensured or in case mediated, precisely, by means of telecommunications.

However, after the conversion into law of the Cura Italia decree-law – which took place on 24 April 2020 – and the subsequent extensions, between 2020 and 2022 the main Italian listed companies – including large industrial and financial groups – decided to follow the “closed door” line, precluding even the possibility of taking part through telecommunication means. This resulted in a total lack of dialectic between shareholders and company board of directors, to the detriment of participation.

The “closed-door” amendment introduced in the latest Decreto Milleproroghe is no. 3.300, tabled by Massimo Garavaglia (Lega), a Member of Parliament who in December 2021 stated his opposition to possible closures to counter the resurgence of the pandemic situation and hoped for “a month without talking about Covid”, and who now instead wants to bar the shareholders’ meeting doors of Italian groups precisely because of the health risk associated with the outbreak 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 since passed, it is legitimate to question the interests protected by this amendment.

This is why ReCommon, ISDE Italy, Greenpeace Italy, The Good Lobby and Fondazione Finanza Etica denounce the further restriction of democratic spaces regarding the possibility of acting as a counterweight to the actions of Italian industrial and financial groups. They also ask them not to abuse the provisions in the Milleproroghe decree-law and to allow participation in attendance at the respective shareholders’ meetings or, as a last resort, participation via telecommunication means comparable to attendance. Finally, the organisations urge the government and regulators to intervene to protect shareholders’ rights, so that such limitations do not arise again in the future.

As demonstrated in recent years by the critical shareholding promoted by civil society organisations, shareholders’ meetings offer the possibility of openly confronting the management of companies and demanding reasons for their actions in relation to the environment, climate and human rights. It is certainly a partial and limited mechanism, but one that seeks to remedy the total lack of accountability of industrial and financial groups – Intesa Sanpaolo and UniCredit in primis – 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.

With the recent approval of the Milleproroghe, even more than in the past, shareholders’ meetings are likely to revolve around only two topics: the renewal of boards of directors and the dividend paid to shareholders. These assemblies thus represent the abysmal distance between the Italian groups and the population, with the needs of the people finding no space other than that of being subjected to decisions taken elsewhere. One thinks of the mega-share buyback programme promoted by Eni in order to further increase the future dividend of shareholders, while energy poverty is rampant in Italy. This issue or the demands of the territories impacted by the conduct of the energy multinationals or by the financing of the banks will not be dealt with during closed-door meetings.

The situation, in perspective, could be even more critical, reading the words of Luciano Acciari, coordinator of the Forum of Board Directors and member of Leonardo’s management. It seems, in fact, that there is an intention to decree the end of “critical” shareholding – which has been on the rise in Italy in recent years – by allowing “live intervention only by shareholders with a minimally significant package of shares, cutting out “troublemakers” in search of visibility or other interests”.

The online daily Italia Informa also strongly denounced this dangerous drift, speaking of “democracy in pieces”. An authoritative voice, if one thinks that the newspaper’s Scientific Committee is composed of members of those same companies that chose the hard line of closed-door meetings between 2020 and 2022, a clear symptom of strong dissent within them.

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