Abstract
Over the last few years, shareholder activism has gained relevance, with new players increasingly looking to get involved in corporate influence and control. Born in America in the 1980s, with corporate raiders, the act of giving a voice to shareholders has spread from the United States to Europe. The aim of this research is to map this trend in the Italian territory, understanding the major current regulations, the biggest players involved, the target companies, the most frequently required objectives, and the overall success rate of such requests compared to other European countries’ neighbours. An analysis of the differences in terms of legal framework and minorities protection is provided as part of this paper, to give the reader the theoretical underpinnings for the subsequent analysis. Considerations on Italian activism follow, from the interpretation of data retrieved from Activistmonitor and Factiva that helped creating a database of 534 analyses of open and closed campaigning by activists throughout the European region since 2010. Italy turns out to be the fifth country in Europe per number of campaigns, with a few large international hedge funds and several smaller niche players. Campaigns tend to target mid and large capitalisation companies, mainly asking for changes in representation boards and having a success rate of over 50%. These findings suggest potential political implications for a successful Italian recovery in the post-COVID era. Further research on this topic and how activism impacts the performance of Italian firms would be invaluable
Highlights
Attention has been recently given in the news to requests and public letters addressed to the management of companies by so-called activist investors on behalf of shareholders asking for changes in the representation boards or for more eco-friendly policies and best practices
Knowing all comprehensive and sometimes contradictory regulations that pertain to the domain of corporate governance and control in a specific country is crucial for any financial player or shareholder that wants to engage in shareholder activism
The most relevant legal sources to be kept into account when launching a campaign in Italy turn out to be the Italian Civil Code, the Consolidated Law on Financial Integration (Legislative Decree 59/1998 or Testo Unico della Finanza), rulings by CONSOB as the Issuer’s Regulation, the Shareholders Right Directive and the Code of Self-Regulation
Summary
Attention has been recently given in the news to requests and public letters addressed to the management of companies by so-called activist investors on behalf of shareholders asking for changes in the representation boards or for more eco-friendly policies and best practices. Activism is a proven trend and the conventional and long-held view that public company shareholders are to be “rationally apathetic” has been gradually fading, as highlighted by Fairfax (2019) The relevance of this shift in corporate governance attitudes is even more evident nowadays, in a society where environmental, social, and governance factors are at the core of the debate over ownership and corporate control. Acharya, Gras, and Krause (2021), in their recent paper, examine how shareholder activists pick sociallyoriented targets identifying the latter as attractive investments due to specific characteristics of compliance and care for the environment and society as a whole Given these considerations, the interest of this study sparked to investigate how this American-born activism is deployed in the Italian corporate landscape
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