With their respective shareholder meetings on 9 and 29 October, both Banca MPS and Intesa Sanpaolo are making more or less significant amendments to their articles of association concerning governance. Moreover, the year, which is drawing to a close, has seen almost all the major Italian banks review their internal processes, in some cases revolutionising their entire management system. The most affected by this period of renewal have been the popular banks, particularly Banco Popolare and Banca Popolare di Milano, albeit driven by necessity and with completely different methodologies. If for Banco Popolare the shift to the traditional management model was primarily aimed at greater efficiency of internal processes, for the BPM The reverse path, to the dual system, was necessary to ensure a greater degree of control and independence of management from strong internal interference.
Even the statutory amendments approved by the assembly of the Bank MPS have marked a turning point, at least in terms of the “political” balance of power within the institution’s management. The new articles of association strip power from the shareholders, who will no longer be able to authorise the divestment of business units; such decisions are now subject to the exclusive approval of the Board of Directors. This provision, in line with market practice, would not cause such a stir were it not set against a backdrop that is, to say the least, highly charged. Employee-shareholders, in particular, have strongly contested the measure, which touches on issues of corporate reorganisation that are particularly sensitive for their own job security. However, Monte Paschi’s independent shareholders should also be concerned about what emerged from the AGM, albeit following another resolution: the authorisation granted to the Board of Directors to increase the share capital by one billion euros without pre-emption rights. The amount of the new capital represents approximately 30% of the bank’s current market capitalisation and, due to the very significant dilution that will affect existing shareholders, could effectively alter its ownership structure. A further cause for concern stems from an amendment to the Articles of Association that was not proposed: the removal of the voting rights limit of 4% of the share capital for all shareholders, with the exception of the MPS Foundation (which is now set to become the former controlling shareholder). Under this provision in the Articles of Association, any new shareholder participating in the future recapitalisation will only be entitled to 4% of the share capital at the general meeting, despite making a significantly larger investment. Anyone who were to accept such a condition would presumably demand a huge discount on the market value of the shares (the vast majority of which carry no voting rights), thereby increasing the already unacceptable dilution of the rights of existing shareholders.
The extraordinary general meeting should take place in a decidedly calmer climate. Intesa Sanpaolo, on the 29th of October, at least according to the limited coverage found in the press. These are nonetheless significant changes for the bank's dual governance system: in addition to the CEO, 2 to 4 managers from within the Group may join the Management Board. Such a strong connection between the Board and the operational structure might raise some doubts about the governance body's independence, but the internal control system should be guaranteed by a majority of external directors and a sufficiently independent Supervisory Board. The increased operational involvement of the Management Board could lead to an effective streamlining of decision-making processes, also achieving cost savings through the elimination of internal Board committees.
UniCredit Already in 2010, a profound structural reorganisation was initiated (through the definition of the “single bank” model and the creation of territorial divisions), which will be completed in 2013. From a governance perspective, however, things appear to be changing much more slowly. The capital increase of January, for €7.5 billion, has partly modified the bank’s ownership structure: the Foundations and the Central Bank of Libya have seen their positions diluted, while the sovereign wealth fund of Abu Dhabi has become the main shareholder and others, such as Caltagirone and Della Valle, have entered or increased their stakes. However, all of this has not yet led to substantial changes in governance: the shareholders’ meeting of May 2012 renewed the bank’s Board of Directors without introducing significant innovations, except for the reduction of directors from 23 to 19 and the appointment of Giuseppe Vita, former Chairman of Allianz SE, a UniCredit partner, as Chairman.
In Mediobanca However, nothing seems to have changed since 2008, the year of the last industrial plan and the abandonment of the dual system (which lasted only one year, incidentally). The new law prohibiting the accumulation of positions in banks and insurance companies, which led to the resignation of 6 directors, offered an opportunity for a thorough renewal of governance. However, the new appointments have continued to follow the logic of dividing positions among the main shareholders: Pier Silvio Berlusconi and Bruno Ermolli for Fininvest, Christian Collin for Groupama, Alessandro Decio for UniCredit, Vanessa Labérenne for the Bolloré Group and Alberto Pecci, who is also a member of the shareholders' agreement that controls the bank with Tosco-Fin and SMIL. All the new directors will have to be confirmed by the next annual meeting on 27 October, which is unlikely to hold any surprises.