“The Physics of Wall Street”. The jurist Guido Rossi in the great hall of the Bocconi University for a conference on the TUF (Consolidated Law on Finance) quotes a book just published by James Owen Weatherall. It's the story of how physicists have successfully applied their science to influencing some of the thorniest problems in economics, from the price of options to bubbles. “Now there are physicists on Wall Street,” Rossi said. No more jurists, no more economists. And capitalism has also undergone a metamorphosis. From industrial capitalism it has become financial capitalism, which has created a finance that is ten times the world's GDP. “But today we are witnessing the transition from financial capitalism to digital capitalism,” says Rossi. Just look at Apple CEO Tim Cook's statements before the Senate on the case of offshore subsidiaries and tax avoidance charges. "It is a pity that the US tax law is not adequate for the digital age", Cook defended himself. In short, capitalism is entering the digital age.
It is this picture of profound changes that forms the backdrop for the reflections on the Consolidated Law on Finance during the round table "Fifteen years after the Consolidated Financial Statements and Perspectives" organized by Bocconi at the end of a two-day seminar of jurists and experts on the subject. Wide-ranging reflections that were inspired by the testimonies and experiences of Rossi, Gabriele Galateri di Genola, chairman of the Corporate Governance Committee and chairman of Generali, and Renato Rodorf, Core councilor of the Supreme Court. The debate revolved around three points: controls and their usefulness; independent directors and remuneration.
CONTROLS AND THEIR USEFULNESS
"We will have a lot of flaws, but compared to fifteen years ago we are day from night", pointed out Galateri who goes back to an emblematic episode. “The first time a control committee had to be set up at the Fiat council, forty showed up. They were all there and it was not clear by whom it had to be done. Today the situation is much better, people are well aware of the responsibilities they bear. Of course, the process is not finished but we are from day to night. Then you need people who have some backbone and training. We must not increase controls, but we must distinguish between those who have had training and those who have not. And where there are problems, sometimes the answer can only be: "because there are criminals around".
When it comes to controls, however, there is often a terminology problem. Controls of what? And for what purpose? For Renato Rordorf adviser of the Court of Cassation, one thing is the control that allows the bodies that have responsibilities in a company to have full control of what happens, another is the supervision that insists on the correct functioning of the company and which has the purpose of guaranteeing a series of external subjects from the company. "To use an automotive metaphor - said Rordorf - a speedometer and a speed camera both have the function of determining speed but the former serves the driver, the latter for vigilance".
INDEPENDENT DIRECTORS
Considerable progress has also been made in relation to independent directors. Of course, the definition of independent director remains difficult and a crux that is being debated abroad as well. “I was on the board of directors of a large English company – Galateri said – they summoned me and made me take an independent exam, the best one could think of. At a certain point a large investment arrives, and I noticed that when the board of directors was faced with operations that risked unbalancing the financial balance for a long-term benefit, he was frightened. The fear of the independents was how to present the operation to the market”. For Galateri, the main problem in Italy is that there are in fact two types of independents, those on the majority list and those on the minority list, who always carry the stamp of their appointment with them. “I don't like these two categories – said Galateri – Either you are independent or you are not”. For Rordorf the impression is that there is no correspondence between the reality of the phenomenon and the juridical description. The problem arises from the fact that the independent director must have an outlook that is not prejudiced by the vision of the majority but at the same time he is called upon to play the role of director. “Which begs a question of what is the independent director? “Perhaps – replies Rordorf – the only true seal of independence lies precisely in the birth certificate, in the designation. The real guarantee of independence lies precisely in being designated by those who have no power of command in society. It would therefore be better to leverage the roles of minority director. The current system seems to me very hybrid and it doesn't seem to be able to reconcile the protection of minorities with participation in management. Even if, Alan Greenspan once said: “I've never seen an independent director versus the CEO”. For Rossi, the solution is that each company has a different concept of independence, depending on the social composition and the balance of power.
Two complementary visions in comparison, that of Rordorf and Galateri, on the one hand the theoretical world of law on the other the operations of those who manage a company. The bridge between the two worlds, Rossi points out, could lie in the training of magistrates: "We could leave this conference - he said - with a sort of request to the Superior Council of the Judiciary so that criminal magistrates must have an internship on the board of directors and understand how does it work".
On the TUF, the following interventions have recently appeared on FIRSTonline:
Philip Cavazzuti (13 / 06 / 2013)
Marcellus Messori (16 / 06 / 2013)
