Electric power transmission pylon miniatures and an Enel logo are seen in this illustration taken December 9, 2022. REUTERS/Dado Ruvic/Illustration
MILAN, May 10 - Fighting opaque governance at Italy’s state-backed companies is proving a tough nut to crack. Attempts by rebel investor Covalis Capital to install its choice of directors on the board of 62 billion euro green champion Enel failed to muster sufficient support from institutional shareholders on Wednesday. That’s a victory for the Italian Treasury – the utility’s top investor with 23.6% – which managed to install oil and gas veteran Paolo Scaroni as chairman, along with other board members.
The effort is not completely lost. Covalis’s unprecedented challenge at Italy’s biggest listed firm highlighted investor dissatisfaction with the unpredictable selection process for board nominees at government-controlled companies, an embarrassment for Prime Minister Giorgia Meloni.
, in which the state has a 30% holding, was on the other hand successful in adding external expertise to the company’s board. That was possibly due to a visible need to improve Leonardo’s weak valuation. The Italian state is in dire need of improving the way it picks its corporate representatives. But to confront Rome, investors will need to make a good case.
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