FFE backs Generali’s Incumbent Board Amidst High-Stakes Governance Battle
On April 24, SfC – Fondazione Finanza Etica (FFE), an Italian member of Shareholders for Change (SfC), opened its 2024 critical shareholding season by speaking at the annual general meeting (AGM) of insurance giant Generali in Trieste. Representing also other SfC-affiliated investors — including ABS, Ecofi, FormaFutura, fair-finance, and Sanso — the foundation used the occasion to continue pressing Generali on a range of sustainability and governance issues.
A contentious board renewal process
This year’s AGM drew national attention in Italy due to a contentious board renewal process, which pitted the incumbent board, backed by major shareholder Mediobanca, against a rival slate led by Roman entrepreneur Francesco Gaetano Caltagirone, a figure closely associated with Italy’s current government.
“We decided to support the incumbent board, and therefore Mediobanca’s list”, explained Barbara Setti of Fondazione Finanza Etica, who took the floor at the shareholders’ meeting. “It wasn’t an obvious decision for a critical shareholder like us, given our years of engagement with Generali’s management on multiple fronts”.
FFE’s critical engagement has focused on Generali’s decarbonisation strategy, its investments in the defence sector, executive remuneration tied to ESG metrics, and the presence of group subsidiaries in low-tax jurisdictions.
“We chose to back the current board because over the years, the management team has shown a proactive attitude in its dialogue with critical shareholders”, Setti noted. “Their responses to our questions have been transparent and aligned with the Group’s overarching ESG strategy, particularly in terms of climate action”.
Generali commitments and unresolved issues
Generali has followed up its public ESG commitments with tangible actions, such as divesting from high-impact fossil fuel companies in Poland and the Czech Republic. The company has also ceased insuring operations in those sectors. Similarly, the group has made strides in improving transparency regarding its presence in tax-favorable countries.
Despite this, FFE affirmed it would continue to engage with Generali on unresolved issues — notably investments in arms manufacturers, especially those involved in nuclear weapons — and would maintain pressure on the company’s transition away from fossil fuels, both in terms of underwriting and investment.
“We are not champions for one side or the other in this boardroom contest”, Setti concluded. “Our decision to support the incumbent board was a pragmatic one. So far, they have shown a willingness to engage constructively on the issues that matter to us. And as the saying goes: Don’t change a winning team”.
Photo: Riccardo Fraccarollo, Pexels