Who is really in charge at Unicredit? Investigations highlight strengths and weaknesses of Unicredit’s governance/ Chi comanda davvero in Unicredit? Le indagini rivelano luci e ombre della governance di Unicredit

Articolo pubblicato su Il Sole 24 Ore 

Federico Ghizzoni, the CEO of Unicredit, has expressed to his employees his just satisfaction with the Florence Court of Review’s decision to rule out any basis for allegations of criminal activity in Unicredit. This case highlights the too casual use of defamatory accusations by the PM. This casual use not only damages companies, but also undermines the credibility of the judiciary itself and the effectiveness of social sanctions. If everyone is accused of the most heinous crimes, the public will struggle to distinguish between alleged criminals and the real ones, with the result that the latter can continue to operate undisturbed.

The only positive outcome of these investigations is that they throw a little light on aspects of management that are normally confidential, a bit like Hilary Clinton’s emails. These revelations allow us to assess the strengths and weaknesses of Unicredit’s governance.

The main strength that emerged from the investiagion is that Unicredit has adopted a procedure for authorization of credit that can withstand the pressures of patronage. Although there was pressure to favor Bulgarella, Unicredit decided not to extend credit to him because two committees opposed. The principle of impartiality is fundamental in all bureaucracies, but particularly in the credit sector. Unicredit has not only shown that they have set up a system of fair valuation of loans, but also that it has sufficient autonomy and authority to be able to withstand pressures from above. I dream of an Italy where this is the standard for all banks.

The first weakness that has come out in this investigation is that these pressures exist at all. Nothing prevents a board member who has information about a particular customer from sharing this information with the credit bureau. But out of respect for the autonomy of the system of internal evaluation, that information must be made in writing and included in the credit record. In this way, the board member assumes responsibility for the information. Similar to how I assume responsibility before the admissions office when I write a letter of recommendation for a student who wants to be admitted to the university. Patronage pressures are different, since they are not based on greater knowledge of the facts, but only on the desire to favor friends, which is generally expected to be reciprocated in the future. The investigation raises the possibility that the pressures in Unicredit are the second type and not the first, an uncertainty that Unicredit needs to clear up soon.

The second point of weakness relates to communication between an ex officio board member and management. One of the key principles of “corporate governance” is that board members should not interfere with the powers they delegated to the CEO. Although the Civil Code gives management of the company to the board as a whole, it’s good business practice to delegate the ordinary management to a director, who then takes the title of chief executive officer (CEO). It’s very important that the directors, collectively or individually, do not interfere in the management delegated to the CEO. First because employees must know who to take orders from, and should not have to mediate between potentially contradictory orders: too many cooks spoil the broth. Second, because the role of a board member is to not only choose the CEO, but also to decide how long to trust the CEO. This decision cannot be made peacefully if the director also assumes the role of manager, mixing the two does not favor the sense of responsibility of the CEO, or peaceful judgments of the director. Finally, by intruding into active management, the directors are more likely to form a “network” of their faithful managers, who will establish preferential relations with members of the board in exchange for an implicit promise of support in their careers. That is why our Civil Code establishes the principle of equal access to information, or the prohibition of the direct exchange of information between officers and individual directors outside of formal meetings of the board and committees. Is this principle respected in Unicredit? Are the wiretappings the exception that proves the rule, or are they indicative of a widespread corporate practice? In his time, Geronzi said he did not need voting rights, a telephone was enough.

The third point of weakness is in regard to the possible role played by Roberto Mercuri, factotum of Vice President (without voting rights) Fabrizio Palenzona. Newspaper reports are contradictory; some say that Mercuri had an office on the executive floor of Unicredit; the wiretappings appear to contradict this hypothesis, as the Unicredit switchboard was not able to connect Bulgarella with Mercuri when Bulgarella telephoned him at Unicredit. But the very fact that Bulgarella asked for Mercuri at the Unicredit switchboard gives the impression that Mercuri is very much at home in the Milan headquarters of the bank. Unicredit has denied that Mercuri attended credit committee meetings, but it remains unclear wether he has participated in other internal meeting at Unicredit..

The Florence court has dispelled any doubt, as unsettling as it was absurd, that in Unicredit there was a criminal association bounded to the Mafia. However, it could not and will never dispel the question of how Unicredit is governed. But this isn’t the court’s job; it’s the responsibility of Unicredit’s Board, specifically Unicredit’s chairman. As Ghizzoni rightly pointed out, compliance with the rules (not just the law, but also the rules of good management) is essential to preserving as valuable an asset as the reputation of the bank. In his letter to the employees, the CEO of Unicredit expressed satisfaction with the outcome of the internal investigation which confirmed that “our colleagues followed the rules.” As we have already said, this is important in the quality of Unicredit loans.  The same conclusions should apply to all the directors.

In these situations, best practices provide for the independent directors to entrust an outside company to do an investigation. We hope that the board of Unicredit acts quickly in this regard, first for the good of Unicredit, the CEO’s authority should not be undermined by the interference of the directors, but even more so for the good of Italy’s reputation. If the board does not move, in the end the European Central Bank, which has supervision over Unicredit, will take action. Waiting for intervention by Frankfurt, though, would be a further setback to the credibility of Italian banking institutions. We hope that this will be avoided. Especially in those that work.


L’amministratore delegato di Unicredit Federico Ghizzoni ha espresso ai suoi dipendenti la giusta soddisfazione per la decisione del Tribunale per il Riesame di Firenze che ha escluso anche il “fumus” di reato nei comportamenti di Unicredit. Continua pagina 41 Questa vicenda mette in luce l’uso troppo disinvolto con cui alcuni PM lanciano accuse infamanti. Quest’uso disinvolto non solo danneggia le imprese, ma mina anche la credibilità della magistratura stessa e l’efficacia della sanzione sociale. Se tutti vengono accusati dei reati più infamanti, l’opinione pubblica fatica a distinguere tra i criminali presunti e quelli veri, con l’effetto che questi ultimi possono continuare ad operare indisturbati. L’unico risvolto positivo di queste inchieste è che gettano un po’ di luce su aspetti gestionali, normalmente riservati: un po’ come le email di Hilary Clinton. Queste rilevazioni ci permettono di valutare i punti di forza e di debolezza della governance di Unicredit.

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