The EconomistNovember 16th 2019 Business 592 firms to be more transparent, especially
about possible conflicts of interest, but
without burdening them with costly new
regulations and reporting requirements.
Robert Jackson, a dissenting commission-
er on thesec(and rare regulator with deep
expertise in data analytics), makes the eco-
nomic case for finesse.
Mr Jackson’s research suggests that
bosses are right to complain about nui-
sance proposals. Shareholder votes put for-
ward by “gadflies”—the ten most prolific
submitters in any given year—coincided
with declines in returns at American target
firms in the months following a share-
holder meeting. However, listed American
firms which faced non-gadfly proposals
outperformed the market by 5% one year
after the shareholder meeting at which
they were presented was held.
That implies that any finalsecruling
should put off gadflies, but not other pro-
posals that would keep managements hon-
est. Doing this will not be easy. But thesec
can surely do better than its current sug-
gestions. These seem overly kind to man-
agers—and, in Mr Jackson’s words, “swat at
a gadfly with a sledgehammer”. 7C
arlo de benedetti is fond of high
drama. When he resigned after only
three months as chief executive of Fiat in
1976, rumours swirled that he was cobbling
together a bid for the then-ailing carmaker
with the help of Swiss financiers. Mr De Be-
nedetti denied ever having such designs.
But he seemed to relish all the attention.
Mr De Benedetti, who turned 85 on No-
vember 14th, is back centre-stage of Italian
business with another unorthodox bid.
Last month he offered €38m ($42m) to buy
a 29.9% stake of gedi Gruppo Editoriale,
publisher of newspapers including La
Stampa and La Repubblica, as part of a plan
to relaunch the business, which is cur-
rently run by his sons, Marco and Rodolfo.His offspring have “neither the skills nor
the passion required to be publishers”, he
lamented in an interview with Corriere del-
la Sera,a rival daily. gedi was a ship with-
out a captain, at the mercy of high waves,
according to the patriarch. On October 28th
he resigned as honorary chairman of gedi.
(Exor, a holding company whose chairman
sits on the board of The Economist’s parent
company, has a 6% stake in gedi.)
Mr De Benedetti’s return may be partic-
ularly operatic, but other Italian Methuse-
lahs are also in the spotlight. Stefano Pes-
sina, the 78-year-old billionaire who is
both the boss and the biggest shareholder
of Walgreens Boots Alliance is exploring a
deal to take the struggling American drug-store chain private. On November 11th kkr,
an American private-equity giant which
teamed up with Mr Pessina in 2007 to buy
Alliance Boots, made a formal offer for
Walgreens. The $70bn buy-out would be
the largest in history. Days earlier data
from Consob, an Italian securities regula-
tor, revealed that Leonardo Del Vecchio,
founder of Luxottica, a maker of spectacles
(including Ray-Ban and Oakley sunglass-
es), who is 84, has just boosted to nearly
10% his stake in Mediobanca, an influen-
tial investment bank. Mr Del Vecchio is ex-
pected to increase his stake further. Italy’s
second-richest man is challenging Medio-
banca to build up its investment-banking
business and to rely less on income from
its stake in Generali, Italy’s biggest insurer
(of which Mr Del Vecchio also owns
a chunk).
Another 84-year-old, Luciano Benetton,
is again getting involved in the business of
making colourful clothes that first made
his family’s name. A revival of the fashion
business may help divert attention from
the clan’s infrastructure business. This was
hurt by the tragic collapse last year of a
bridge in Genoa managed by Autostrade, a
toll-road operator owned by a holding
company the Benettons control.
Ageing patriarchs who are reluctant to
bow out, or so much as plan for the day
when nature will eventually force them to,
are a feature of Italian capitalism. Giorgio
Armani is running his fashion empire at
the age of 85. Silvio Berlusconi, Italy’s 83-
year-old former prime minister, remains
the power behind the throne at Mediaset,
Italy’s biggest commercial broadcaster
(which is run by his son, Pier Silvio). When
Bernardo Caprotti died three years ago
aged 90 he was still managing Esselunga, a
supermarket chain he founded.
In the past ten years the leadership of
companies has been rejuvenated, observes
Franceso Giavazzi at Bocconi University in
Milan. But, as Raffaella Sadun of Harvard
Business School points out, that may be be-
cause founders put younger family mem-
bers in charge as a way of retaining control.
“It is not clear their relations are the best
people for the job,” she says. Plenty of tal-
ented managers are reluctant to join firms
where their career prospects would be sub-
ordinated to feckless scions. The mid-sized
companies of Germany’s Mittelstandcould
teach corporate Italy a thing or two about
how to handle succession, Ms Sadun says.
The younger De Benedettis were taken
aback by the paternal foray. Despite a sharp
decline in third-quarter profits, they insist
that the group needs no restructuring. At
least the fatherly bid, however hurtful,
could be lucrative. In 2012 Mr De Benedetti
gave Rodolfo, Marco and his third son,
Edoardo, his stake in cir, a holding com-
pany which owns 44% of gedi. Each would
pocket millions if he bought it back. 7Octogenarians are shaking up corporate ItalyItalian businessWhen I’m 84
Still in the driver’s seat