The Consob Report on Corporate Governance of Italian Listed Companies of 2021 highlights how "directors' skills in the field of sustainability and digitalisation" constitute "a topic of particular interest in light of the profound structural changes underway and the effects they have on business activities".

The resulting picture regarding sustainability issues is extremely interesting.

First of all, in the governance systems the traditional governance model continues to be prevalent, with boards of directors mainly consisting of about ten members. Nonetheless, there are some changes compared to the past in terms of presence of independent and minority directors. On average, two directors on each board also hold positions on the boards of other listed issuers (so-called interlockers).

With regard to intra-board committees, as per tradition, the remuneration committee and the control and risk committee, remain the most widespread.

However, the number of companies that set up nomination committees and, above all, sustainability committees is growing.

These committees are mainly consist of independent directors and women in more than half of the cases; moreover, the professional background of the members is more diversified than that of the entire board due to a less marked presence of the managerial profile.

At the end of 2020, directors with sustainability skills already held, on average, 14,6% of positions. Moreover, the proportion of companies with at least one director with sustainability or digital skills is around 72% and just over 74% respectively. The figure also varies according to companies size (being lower among companies belonging to the Star index), sector of activity (reaching higher values for each skill in the services sector) and the identity of the controlling shareholder, reaching a higher value in companies controlled by a public entity.

Among 139 medium-large companies analysed by Consob, 78 companies have set up sustainability committees; the offices of directors with skills in this area represent more than 24% of the total (26% among mid-cap companies, around 30% for women and almost 18% for men).

In 2020, families - which control 64% of listed companies - are the main reference shareholders. In the report, Consob has carried out a census of specific skills in the field of sustainability and digitalisation, using information based on four load-bearing elements: (i) training, (ii) professional experience (e.g. participation on the boards of companies, founding start-ups or launching significant projects in the fields of sustainability and digitalisation), (iii) teaching and research (essays, papers, participation in conferences) and (iv) participation in working groups, ministerial commissions or steering committees of research centres.

The Consob Report on Corporate Governance gives the idea of a progressive intensification, in terms of both quality and quantity, of figures dedicated to the topic of sustainability, no longer - or no longer only - in the purely productive dynamics, or in an advisory, but also in sustainability functions in governance, i.e. in the beating heart of the company.

This is entirely logical, considering the growing relevance of sustainability issues in the financial dynamics of listed markets. On this point, please refer to Consob's June 2021 Report,"Finance for sustainable development Trends, ongoing issues and prospects in light of the evolving EU regulatory framework. Finance for Sustainable Development". It should also be considered that in 2021 the MIB-ESG Index dedicated to Italian blue-chips was launched, designed to identify the large Italian listed issuers with ESG best practices (The MIB-ESG is Euronext's second national ESG index, after the CAC40 ESG launched in March 2021).

In this very dynamic context, the Consob report on Corporate Governance offers plenty of food for thought.

It will be interesting to see, over time, what shape the work of the sustainability committees will take, what the perimeters of their delegated powers will be, what the functional relationship will be between the prerogatives of the sustainability delegates and the prerogatives typically attributable to more traditional delegated powers, remuneration and control and risks. And it will be interesting to see how this growing importance of sustainability functions in governance, will affect the anatomy of boards and the related decision-making dynamics.

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