Giovanni Lombardi’s Post

https://lnkd.in/dbVDAgwh The 2025 edition of the #OECD Corporate Governance Factbook provides new data and insights on #corporate #governance frameworks across 52 economies (including all OECD, G20 and Financial Stability Board jurisdictions) and their evolution since 2014. #Shareholder meetings held remotely have become more widespread, raising new challenges for shareholder rights. Since 2022, the share of jurisdictions allowing both virtual-only and hybrid shareholder meetings increased and now reaches 85% and 94%, respectively. Governments should ensure that companies that conduct general shareholder meetings remotely provide equal access to information and opportunities for participation to all shareholders regardless of whether they participate in person or virtually. The OECD report provides an overview of #Italy’s corporate governance framework and related information benchmarked against 51 other jurisdictions covered by the Factbook, including all OECD and G20 members. Are we facing new challenges in terms of efficiency, effectiveness and overall competitiveness?

Corporate governance is often theatre. Power is backstage.   Almost three decades ago, I translated into Italian Mark J. Roe’s "Strong Managers, Weak Owners," a book whose ideas remain, for the most part, remarkably relevant. Its central insight has stayed with me: corporate governance is not primarily about formal structures, but about who actually holds power - and why.   The paradigm case of Roe’s thesis: dispersed ownership gives managers wide discretion; CEO–Chair duality remains common; and boards, while formally elected by shareholders, are effectively shaped by incumbents. Institutional investors have grown more assertive, yet structural checks remain weaker than in Europe: there is no mandatory separation of powers, no codetermination, and no “comply or explain” framework. Speed and executive authority come at the cost of the agency problems Roe identified.   The American case is the natural starting point. From there, it is useful to compare boards across Europe’s four largest economies:   United Kingdom: Boards are formally elected by shareholders but largely shaped by the existing board and institutional investors. The system shares features with the U.S. model, but the differences matter: mandatory separation of Chair and CEO, a “comply or explain” regime and an active stewardship culture. CEO influence is real but structurally tempered in ways the American model does not replicate.   Germany: The two-tier system places real authority in the supervisory board, where shareholders and employees are both represented. Ownership is more concentrated and decision-making slower but more balanced. The model is not static; however, codetermination is under increasing pressure and the practical influence of employee representatives varies widely.   France: A flexible framework where companies choose between one-tier and two-tier structures, and the Président-Directeur Général can concentrate power to an unusual degree. The state remains an active shareholder and the Florange Act’s double voting rights reinforce incumbent holders.   Italy: Often misunderstood. The "voto di lista" allows minority shareholders to elect board members, creating a formal counterweight to controlling shareholders. In practice, however, boards are shaped by those who control the dominant list, leading to two realities: family-controlled firms governed around a founder or bloc and state-influenced firms reflecting national priorities.   Roe's insight explains these differences. The key variable is not the board itself but the underlying ownership structure, shaped by political and institutional choices. The critical questions are always the same: who selected the board, who can replace it and to whom is it truly accountable.   Neither model is universally superior. The outcomes depend less on formal design than on how ownership, institutions and politics interact in practice. #CorporateStrategy #InstitutionalInvestors #CapitalMarkets #BoardDynamics #AgencyTheory

#LegalGeopolitics What should #boards, #investors and #legal leaders be watching right now? The global economy is sending mixed signals. 🇺🇸 US inflation has risen to 3.8%, and economists are once again discussing higher interest rates. 🇨🇳 Chinese retail sales have fallen 0.6%, while property investment has collapsed 16.2%. One economy is struggling with #inflation. The other with #demand. What should we expect next? 1️⃣ More Chinese exports seeking foreign markets. 2️⃣ Higher-for-longer US interest rates. 3️⃣ Increased volatility in equity markets. 4️⃣ Europe caught in the middle between weak domestic demand, #Chinese competition and US monetary policy. The biggest risk for #Europe is not inflation. Europe is becoming the market where #China needs to sell and the US needs to finance, while generating too little demand of its own. In other words: more #geopolitics and less free market. For #CorporateLawyers, General Counsel and #LegalAdvisors, understanding economic geopolitics may soon become as important as understanding the #law itself. Because #contracts, regulations and #litigation are increasingly being augmented by #AI. Understanding how #geopolitics reshapes markets, supply chains, regulation and business strategy remains a profoundly #human task. The future #GeneralCounsel may spend less time interpreting contracts and more time interpreting the world. #CorporateLaw #LegalInnovation #CorporateGovernance #BusinessStrategy #Leadership

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EU Inc. weak compromise: beware of creating 27 “28th regimes” The EU Inc. project is moving forward. Recent compromise amendments in the European Parliament confirm the basic architecture: a harmonised limited-liability company form “provided for under the law of each Member State.” This seemingly technical formula points to what I think is one of the main risks of the project. The whole promise of a “28th regime” is to allow entrepreneurs and investors to operate across Europe without navigating 27 substantially different corporate-law systems. But if national law remains the default rule whenever the EU Regulation is silent — on creditor protection, governance, employee participation, incorporation and other crucial matters — we may end up not with one EU Inc., but with 27 different EU Inc.s. There is an inevitable trade-off here. Greater reliance on national law may make the proposal politically easier to adopt and perhaps strengthen the case for Article 114 TFEU as its legal basis. But every additional national-law carve-out reduces the very European added value that justifies the project. We have seen something similar with the European Company (SE). The EU Inc. should learn from that experience rather than reproduce it. A 28th regime is useful only if it is genuinely the 28th — not a new label attached to the existing 27. In this perspective, while the original draft was an innovative and workable tool (notwithstanding some uncertainties), the compromise that is now emerging, with an apparently stronger reliance on national law, hinders the project and, from a corporate law perspective, risks to disappoint, like the SE already did. EU legislators: If you do not even have the courage to create one truly supernational optional regime, let me offer a suggestion. Stop loosing your time and ours, and abort the idea. European Parliament European Commission European Securities and Markets Authority (ESMA) European Corporate Governance Institute (ECGI) AMF Italia - Associazione Intermediari Mercati Finanziari SDA Bocconi Bocconi Angelo Sraffa Department of Legal Studies The European House-Ambrosetti AREL Single Market Lab

I am honoured to participate in the 43rd International Symposium on Economic Crime at Jesus College, Cambridge, contributing to a panel exploring one of the most delicate questions in financial regulation: what must banks truly “know” when managing third‑party wealth that may become entangled in criminal proceedings? My presentation, “The Knowing Paradox”, examines how Italian jurisprudence is redefining the boundaries of compliance, and how the traditional separation between public‑law obligations and private‑law duties is rapidly dissolving. The most striking development comes from a recent ruling of the Italian Supreme Court, which has now clarified that anti‑money laundering obligations — though rooted in public law — can directly reverberate within the private contractual relationship between bank and client. This is a profound shift: AML duties are no longer confined to supervisory interactions or administrative enforcement. They now concretise the bank’s contractual duties of fairness, good faith, and protection, becoming part of the internal standard of professional diligence. Furthermore, compliance must be effective, documented, and operational, not merely drafted. Substantial blindness to anomalies may expose the bank to civil liability, even when no regulatory sanction has ever been imposed. Placed against the backdrop of other recent rulings, a narrow corridor emerges: On one side, the risk of formalistic compliance, where models exist only on paper and fail to detect or escalate anomalies. On the other, the scenario where banks act under binding judicial orders, executing measures aimed at preserving asset value during criminal proceedings, a context in which obedience to judicial authority is recognised as a complete defence. This duality reveals the core of the knowing paradox: banks must know enough to detect and report anomalies under the AML framework, yet they must also operate within strict confidentiality constraints, unable to inform clients of suspicious transaction reports. At the same time, when judicial authorities intervene, banks must execute orders promptly and precisely, even if the long‑term outcome for the client may later change. The convergence of these edges shows how compliance, civil liability, and asset management are now deeply intertwined. A fascinating evolution — and one that will undoubtedly influence compliance culture, litigation strategies, and risk governance across the financial sector. #EconomicCrime #AssetRecovery #Compliance #AML #Model231 #BankingLaw #RuleOfLaw #CambridgeSymposium #LegalRisk #FinancialRegulation #CorporateGovernance #RiskManagement #AntiMoneyLaundering #ContractLaw

𝗔𝗿𝘁𝗶𝗳𝗶𝗰𝗶𝗮𝗹 𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗕𝗼𝗮𝗿𝗱𝗿𝗼𝗼𝗺: 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗖𝗵𝗮𝗻𝗴𝗲𝘀 𝗮𝗻𝗱 𝗡𝗲𝘄 𝗢𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻𝘀 Many boards might say: "But we don't use AI." The reality is different. Marketing uses it to create content, the CFO relies on it for financial forecasts, and the legal team uses it to speed up research. Yet many companies have still not formalised a structured policy for the use of artificial intelligence, nor assessed the potential risks tied to tool errors or data security breaches. 🔍 𝑮𝒓𝒐𝒘𝒊𝒏𝒈 𝑹𝒆𝒈𝒖𝒍𝒂𝒕𝒐𝒓𝒚 𝑶𝒃𝒍𝒊𝒈𝒂𝒕𝒊𝒐𝒏𝒔: 𝑾𝒉𝒂𝒕 𝒅𝒐𝒆𝒔 𝒕𝒉𝒆 𝒍𝒆𝒈𝒂𝒍 𝒇𝒓𝒂𝒎𝒆𝒘𝒐𝒓𝒌 𝒔𝒂𝒚? Article 123-bis of the TUF (Italy's Consolidated Law on Finance), as amended by Legislative Decree 47/2026, requires listed companies to disclose in their Corporate Governance Report: ▪️ AI policies: They must describe their policies on the use and monitoring of new technologies. ▪️ IT risks: They must describe how they manage and monitor IT risks, including cybersecurity. ⏳ "𝑾𝒉𝒆𝒓𝒆 𝑨𝒅𝒐𝒑𝒕𝒆𝒅" 𝒂𝒏𝒅 𝒕𝒉𝒆 "𝑪𝒐𝒎𝒑𝒍𝒚 𝒐𝒓 𝑬𝒙𝒑𝒍𝒂𝒊𝒏" 𝑷𝒓𝒊𝒏𝒄𝒊𝒑𝒍𝒆 The rules require the market to be informed accurately and fully, even though there is no absolute obligation to adopt these policies. Incomplete information could be read as an omission. 🕵️♂️ 𝑻𝒉𝒆 𝑲𝒆𝒚 𝑹𝒐𝒍𝒆 𝒐𝒇 𝑨𝒖𝒅𝒊𝒕𝒐𝒓𝒔: Under Article 123-bis, paragraph 4, of the TUF, it is the statutory auditor's responsibility to ensure that the information on IT risks and AI policies is properly included in the report. 🌎 𝑾𝒉𝒚 𝒅𝒐𝒆𝒔 𝒊𝒕 𝒎𝒂𝒕𝒕𝒆𝒓 𝒇𝒐𝒓 𝑩𝒐𝒂𝒓𝒅𝒔 𝒂𝒏𝒅 𝑰𝒏𝒗𝒆𝒔𝒕𝒐𝒓𝒔? This isn't compliance for its own sake. A well-built AI policy answers three questions every board should already be asking: who is responsible when the output is wrong, what data we're feeding these systems, and what we tell investors when they ask. For listed companies, but above all for those preparing for a listing or a fund's entry, this is already a due diligence topic today. Showing up unprepared means explaining to an investor why you haven't governed a technology you use every single day. #AIGovernance #CorporateGovernance #Board #CapitalMarketsReform

The Future #Lawyer Will Need Three Things: Competence, Independence and Governance. And what about fees? The American Bar Association (#ABA) focuses on technological competence. #Lawyers must understand #AI, verify its output, protect client information, and never delegate their professional judgment to a machine. The Council of Bars and Law Societies of Europe (#CCBE) takes a broader view. It asks a different question: what happens to the #legal profession if legal analysis increasingly depends on a handful of AI providers? The issue is not only competence. It is also independence. The AI Act adds a third layer: #governance. Using AI is no longer enough. Organizations must understand its risks, limitations, and how it is being used. In other words, the lawyer of the AI age may need three things: ▪️ Technological #competence (ABA) ▪️ Professional #independence (CCBE) ▪️ #Governance and #accountability (AI Act) The paradox is that Europe already has the AI Act, but it still lacks a practical framework as detailed as the ABA’s Formal Opinion 512 and a broad debate on professional independence comparable to the one emerging within the CCBE. Yet another question deserves attention. The ABA has already addressed a difficult issue: if AI allows a #lawyer to complete a task in a fraction of the time, should the lawyer still charge the client as if the work had been done without AI? Why is this discussion still largely absent from the European debate? If AI dramatically increases #productivity, who should benefit most from that efficiency: the lawyer, the client, or both?

Very interesting development in Italy . At least a serious attempt to establish some key references for a more serious risk assessment and accountability of companies and professional bodies. For sure not perfect, but let’s see how case law and actual operational issues will develop in the attempt to comply and enforce these new rules

GC Elite and Fred Mazo kindly invited me to contribute to the GC Elite community discussions with a few considerations drawn from day-to-day experience as General Counsel. I chose to reflect on a theme that I find particularly relevant in practice: how an in-house lawyer can stay close to the business, understand its priorities and support decision-making, while preserving the independence and judgement needed to raise concerns when necessary. The article touches on some qualities that, in my experience, help a GC contribute effectively: understanding the business, taking ownership, approaching risk pragmatically and trying to anticipate issues before they arise. At the same time, being a trusted business partner does not mean simply agreeing with management. There are moments when the GC must ask difficult questions and help the organisation maintain a clear sense of direction. These are simply a few reflections based on experience, and I am very grateful for the opportunity to contribute to the GC Elite discussion. #GeneralCounsel #InHouseLegal #LegalLeadership #CorporateGovernance #RiskManagement #GCElite You can give a look here: https://lnkd.in/evkq6-8P