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
  • Research and Policy to Tackle Climate Change

    Bocconi students on the economics seminars organized by IGIER. In the third article of the series, Federico Scabbia reports on the work of Solomon Hsiang, Berkeley University, Christian Gollier, Toulouse University, and Tom van Ierland, DG Climate Action  

  • Why American Deterrence May Not Work

    In a world with many well armed and unpredictable countries, tough talk from the US is riskier than ever  


  November 2020  
Mon Tue Wed Thu Fri Sat Sun
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


All Seminars
  • Uncertainty and Information Acquisition: Evidence From Firms and Consumers

    Christopher Roth, Warwick In order to receive the invitation link for the online streaming, please contact


  • Power of Words: How Do Employee Narratives Shape Our Understanding of Managerial Incompetence?

    Amit Nigam, Class Business School

    Webinar joint with CERGAS