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07 October 2019 • Articles

Activist Insight

The weekly wrap

Fresh from vacation, I attended a conference on shareholder activism and ESG (environmental, social, and governance) in Italy at the Bocconi University, organized by international law firm Jones Day and shareholder services provider Morrow Sodali.

Here are some of the highlights from the conference:

Morrow Sodali Chairman John Wilcox hailed the Business Roundtable’s decision to move away from a focus on shareholders to a stakeholder approach. Wilcox believes the entire ESG trend will change how shareholders and companies relate to each other. “This is a movement that has a special characteristic, unlike anything that we have seen before. It’s a movement that has changed expectations of both companies and institutional investors,” Wilcox said.

Yet the rise of ESG leads to additional tasks for already over-burdened directors, particularly in Italy, where unlike in the U.S., their compensation consists of cash only and no stock options. “If you really make the calculations, the hourly compensation [for directors] is around 200 euros an hour. That may sound like a lot of money, but that is just what a junior associate or a hairdresser makes,” Marco Ventoruzzo, a professor of law at Bocconi, said.

“One of the long-term impacts of ESG is likely to be that we will have to pay directors more,” Wilcox added.

Access here the full article by Iuri Struta:

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