The Independence of Those Who Control

The Independence of Those Who Control


Independent directors are responsible for monitoring management opportunism and protecting shareholders’ interests, yet their role is still widely debated. “We need to ask ourselves how to make their role effective in controlled companies”, says Giovanni Strampelli, associate professor of Business Law. To take financial and family ties between directors and controlling shareholders into account is not enough. A director may have an incentive to overlook his own duty because of non-material relationships.

Professor Strampelli therefore proposes the adoption in the United States of the Italian legal regime where minority shareholders have some power over the election of some independent directors. In Italy, minority shareholders are usually institutional investors acting under the guidance of Assogestioni, the Italian Investment Management Association that plays a central role in selecting candidates using the services of headhunters and observing enhanced independence requirements.

“We must take the human element into account, too. Over time, directors inevitably create social links which can weaken their independence. So, they must be subjected to stricter term limits. They are often professionals who do not have specific skills compared to those of the executive directors. In order to enhance their authority, they must receive full information from the executive directors and be given the power to monitor transactions that are influenced by controlling shareholders”. Finally, public disclosure of advice provided may strengthen the link between a director’s individual vote and his/her reputation, and thus further promote his/her independence.

Read more about this topic:
Massimo Magni. The Sense of Purpose of Leaders 4.0
Are Narcissists Good for Their Acolytes?
The Authenticity of the One Guiding the Team
When Style Reduces the Discount
What if Training Is More Important than Talent?
The Boss’s Emotions
Women in Politics. Ask the System
Women in Parliament Save Lives. Scores of Them

by Claudio Todesco


All News
  • Economics Research, Bocconi in the European Top 5

    In the Tilburg University ranking of the best universities for scientific performance in economics research, Bocconi is 4th in Europe, 1st in continental Europe, and 18th in the world  

  • Lockdown Measures Are Not the Only Things Keeping Us at Home

    Two Bocconi MSc students, in a team with two Oxford PhD students, had their paper published in two prestigious outlets. Observing mobility data from mobile devices, they found that people in the US often distanced themselves before official measures were imposed in counties with high education, high trust in science and high income  


  May 2020  
Mon Tue Wed Thu Fri Sat Sun
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31


All Seminars
  • Imperfect Macroeconomic Expectations: Evidence and Theory

    Marios Angeletos (MIT) Paper


  • The Commission's proposals for the Multiannual Financial Framework and the Recovery Instrument
    The EU Response to the Covid Crisis

    Chair Eleanor Spaventa, Bocconi University Speakers Mario Monti, President, Bocconi University; Catherine De Vries, Bocconi University; Guido Tabellini, Bocconi University To register, please contact