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We believe there is no single governance model that delivers the best long-term outcomes. We remain receptive to various governance approaches and place trust in the boards and management teams of the companies we select, while insisting on accountability should that trust be compromised.
In March 2020, Italy enacted emergency legislation in response to Covid-19, allowing companies to hold shareholder meetings behind closed doors. Companies are required to designate a representative to participate on behalf of shareholders; however, shareholders themselves are not permitted to attend either in person or virtually. This legislation, which remains in force, diverges from practices in many other jurisdictions. The legislation also enables companies, subject to shareholder approval, to amend their articles to adopt this meeting format in perpetuity. Several of our Italian holdings continue to hold closed-door meetings. When querying this with investee companies, they have often cited increased efficiency and competitiveness as justification. The ability to attend shareholder meetings is a fundamental right that fosters transparency and accountability. While shareholders may not always exercise this right, its availability is crucial in exceptional circumstances and serves as an important escalation tool.
The ability to attend shareholder meetings is a fundamental right that fosters transparency and accountability. While shareholders may not always exercise this right, its availability is crucial in exceptional circumstances and serves as an important escalation tool.
In 2024, we opposed several proposals to permit these closed-door meetings indefinitely. In instances where such formats persisted, we escalated our response by opposing the financial statements in 2025 and communicating our concerns regarding reduced transparency and accountability to the board chairs of several Italian investee companies. We indicated the possibility of further voting escalation in 2026 should these practices continue without adequate justification.
Following shareholder pressure, at the end of 2025, the European Commission opened infringement proceedings against Italy, citing closed-door meetings as an incorrect transposition of the Shareholder Rights Directive. We are monitoring regulatory developments closely and our engagements with investee companies are ongoing.