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Ehtel notes

Oct 14 '11

BPM to further boost management powers in new bylaws

Following an audit at BPM earlier this year, the Bank of Italy had criticised the excessive grip the lender’s employee-shareholders hold on its strategy — hindering cost-cuts and a streamlining of the bank.Last week the central bank asked BPM to completely renew its top ranks as the Milanese bank moves to appoint new management and supervisory boards.BPM said in a statement it had changed the bylaws that it would put forward to shareholders on Oct 22.In the latest version, the management board — and no longer the supervisory board — could decide on the admission or exclusion of new shareholders.This and a number of other changes prodded by the central bank all went in the direction of increasing the management board’s independence and powers.An association of BPM’s employee-shareholders owns less than 4 percent of the mid-tier lender but controls shareholder meetings because of a one-head-one-vote rule in BPM’s bylaws.BPM’s shareholders will appoint the supervisory board which in turn will name the management board.BPM said that, in the latest version of the bylaws, the supervisory board could give its opinion on a matter if asked by the management board and it would not be binding.In a further move aimed at loosening the control employee-shareholders have over shareholder meetings, the limit on the number of proxy votes had been raised to five from three.This change should allow greater representation of non-employee shareholders at the meetings and had been rejected by BPM’s shareholders earlier this year.Shares in BPM closed up 6.4 percent on Friday, leading gains on Italy’s blue-chip FTSE MIB stock index .FTMIB, as speculation mounted on changes to its top management.

  1. colenemctrondea posted this