Telecom Italia (TI) directors have unanimously approved a plan led by CEO Marco Patuano to change the company’s corporate governance to give minority investors more influence.
Shareholders will vote on the plan, which would see the number of board…
Telecom Italia (TI) directors have unanimously approved a plan led by CEO Marco Patuano to change the company’s corporate governance to give minority investors more influence.
Shareholders will vote on the plan, which would see the number of board directors reduced from 15 to 13 or 11, at the annual general meeting on 16 April.
The current board’s term expires in April and investors with a 0.5% stake or more will be able to nominate candidates for the new one.
The plan would see the company select a non-executive, independent chairman who “represents an impartial guarantor of all shareholders”. Current chairman Aldo Minucci took on the role earlier this month, having stepped in as acting chairman when former chairman and CEO Franco Bernabe stepped down last October.
The plan would also introduce stricter, more transparent measures to ensure the board “has a substantial level of independence from both the management and the reference shareholder”. As such, the majority of directors would be independent from both the management team and largest shareholder Telco, in which Spanish incumbent Telefonica is the largest shareholder. Telco is currently entitled to appoint the majority of board members.
The plans follows a call from minority shareholder Marco Fossati’s Findim Group, which has about a 5% stake in TI, to give minority shareholders greater board representation. Both Findim and small shareholders’ association Asati have complained that the current board prioritises majority shareholders. The duo made an unsuccessful attempt to replace the board last December.
The board said its decision to back the plan was based on a range of factors, including debates that arose at a 20 December shareholder meeting, its own experience and an in-depth benchmarking analysis comparing corporate governance at TI with that at similar Italian and international companies.
Only 11 of TI’s 15 board seats are currently filled, with five of these directors deemed independent. Telefonica CEO Cesar Alierta and former COO Julio Linares stepped down from the TI board last December to avoid perceived conflicts of interest in Brazil, where the Italian and Spanish telcos compete.