CONSOB: Companies Must Not Hide Behind The Italian Regulator’s Skirts

In Italy, the regulator responsible for investor protection, efficiency, transparency and development of the Italian securities market is the Commissione Nazionale per le Società e la Borsa (better known by its acronym CONSOB). It carries out its duties within the framework of the “European System of Financial Supervision” in place since 2011.

In recent weeks, CONSOB has taken an important step, one that is worth highlighting for its impact on Italian corporate governance. On December 2, 2021, it published “a request for observations” from market participants asking for their views about outgoing boards of directors that present their own list of candidates for the renewal of the board. CONSOB is taking its cue from Assicurazioni Generali, perhaps Italy’s most important company. In recent months, the insurer’s board has been gripped by a dispute concerning the methods used to appoint its next board of directors: whether the list of candidates should be presented by the board itself, or by individual shareholders through lists deposited at the shareholders’ Annual General Meeting (AGM).

In its request for observations, CONSOB, first of all, confirmed that the procedure already adopted by some organizations (i.e. that the board can present its own list) is absolutely compliant with the regulator’s guidelines.

Secondly — and this, in my opinion, is the most significant news – CONSOB clearly affirms the illegitimacy of regulatory intervention in this internal corporate matter.  In fact, CONSOB says, boards must decide for themselves how to proceed with respect to governance practices. This is a clear and strong response to certain people who — by trying to condition institutional outcomes — think they will be able to punch above their own weight and the size of their shareholding. Respect for the state’s institutions is too often disparaged by those who have yet to grasp the logic of protecting minority investors, consumers, and the various other parties who run the risk of seeing their rights violated.

CONSOB’s signal to the market gathers some pieces that had been left lying on the public table for quite a long time, and, finally — in its calm clarity — provides a road map for those who are already preparing their lists of board candidates and to those who want to follow what, outside Italy, is now common practice.


Francis Bacon reminds us that “nothing doth more hurt in a state than that cunning men pass for wise.” Once again, CONSOB has demonstrated that it does not permit investors’ interests to be damaged. In this era of hard work and sacrifice, when the pandemic and hardship put organizational and social stability to the test, one hopes that retail investors – who usually count the least and are ignored by the media’s strident headlines — will be well protected and fairly considered. One also hopes that the results, the consistency and the preparation of the managers who have led some of our companies in recent years will win the market’s recognition and the support of the system.

The world is leading us towards new forms of governance and — who knows? — perhaps we will soon no longer talk about the dichotomy between the board and CEO, or between board and management. Instead, perhaps we will see a group of professionals that are perfectly integrated, on the board and in management, working for the good of the company, and respecting reciprocal interests which are none other than those at the service of the community. And I bet that some enlightened entrepreneur is already at work on these new organizational models right now.

The Tycoon Herald