Telecom Italia SpA agreed to let shareholders vote on its next chairman, giving in to demands by Marco Fossati for greater investor participation in corporate governance decisions at the nation’s biggest carrier.
Directors yesterday approved a proposal by Fossati’s Findim Group SA, which has a stake of about 5 percent in Milan-based Telecom Italia, to include a vote on the new chairman in the April 16 annual meeting, the company said. The board will elect the chairman if no candidate receives a majority of shareholders’ votes, it said.
Allowing a chairman vote at the general meeting would further curtail the influence of Spain’s Telefonica SA, the leading investor in Telco SpA, a group that owns 22.4 percent of Telecom Italia. Telefonica withdrew its two representatives on the Italian carrier’s board last year to avoid perceived conflicts of interest because the companies compete in Brazil. Telecom Italia’s board currently picks its chairman, and Telco has the right to name four-fifths of the directors.
Bloomberg News reported the board’s position yesterday.
Fossati, who tried unsuccessfully to dismiss Telecom Italia’s board in December, this week asked that investors be allowed to vote for the carrier’s chairman. Shareholders are choosing a board for the company for the next three years and have until March 22 to propose director candidates.
Last month, Telecom Italia named Aldo Minucci interim chairman, filling a position left vacant after the departure of Executive Chairman Franco Bernabe in October. Minucci said that he would only serve in the position until a new board is chosen.
Telecom Italia Chief Executive Officer Marco Patuano proposed changes last month that address concerns minority investors have too little influence. Patuano asked for stricter requirements for directors classified as independent, and proposed cutting the number of board seats.
The shares fell 1.7 percent to close at 80.6 euros cents in Milan trading. They have gained 14 percent this year, giving Telecom Italia a market value of 14.7 billion euros ($20.4 billion).