Telecom Italia’s (TI’s) board of directors has approved a proposal by activist investor Marco Fossati’s Findim Group to let shareholders vote on its next chairman.
The board added the chairman vote to the agenda of its 16 April annual general…
Telecom Italia’s (TI’s) board of directors has approved a proposal by activist investor Marco Fossati’s Findim Group to let shareholders vote on its next chairman.
The board added the chairman vote to the agenda of its 16 April annual general meeting at Findim’s request.
If a majority of shareholders do not agree on the appointment, the board will elect the new chairman itself, according to a statement from the Italian incumbent.
Allowing shareholders to vote on the new chairman at the meeting, at which they will choose the board for the next three years, curbs the influence of TI’s largest shareholder Telco, in which Spain’s Telefonica is the leading investor.
Historically, Telco has selected the majority of board members who, together, have elected their own chairman.
Findim, which has a stake of about 5% in TI, and small shareholders’ association Asati have complained that the current board prioritises the interests of majority shareholders and, at a meeting on 20 December last year, made an unsuccessful attempt to replace it.
Asati chairman Franco Lombardi told TelecomFinance that the association strongly supports Findim’s request to include the chairman vote on the agenda of the AGM. Asati also made an official request to the TI board to add the item to the agenda “in order to mitigate the power of Telco”, he said.
Debates at the 20 December meeting contributed to the board’s decision last month to approve a plan led by CEO Marco Patuano to change TI’s corporate governance to give minority shareholders more influence. The plan, also to be voted on at the 16 April meeting, would see the number of directors reduced from 15 to 13 or 11 and the company select a non-executive independent chairman.
The plan would also introduce stricter, more transparent measures to ensure the board has what TI has described as a “substantial level of independence from both the management and the reference shareholder”.
TI’s current chairman Aldo Minucci took on the role last month, having stepped in as acting chairman when former chairman and CEO Franco Bernabe stepped down last October.
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.
