Italy’s government has so far done little to encourage responsible business
Government in Italy seems to be a matter of quantity rather than quality. The present administration, led by Mario Monti, is the 61st since 1946. Only one Italian government, under Silvio Berlusconi from 2001 to 2006, actually managed to serve out its term.
The current government will also be short-lived. Monti, an economics professor and former European commissioner, is a crisis manager brought in to clean up the mess after Berlusconi’s last stint. Monti’s two basic objectives are to reduce Italy’s crippling debt, and to get the stagnant economy growing. He must act quickly, because Italy will hold elections in April 2013.
In such an unstable situation, it is not surprising that the government does little on corporate social responsibility. “They don’t care too much,” says Marisa Parmigiani, secretary-general of Impronta Etica, an Italian non-profit corporate responsibility association. “There is no prospect of the government providing a strong lead.”
The lack of leadership is not just a consequence of the crisis, however. The hands-off approach to corporate responsibility is longstanding. The limited initiatives that have been started have usually been reactions to developments at European level.
In 2002, for example, the European commission set up a multistakeholder forum on corporate responsibility. Italy held the European Union’s rotating presidency in the second half of 2003, and promised to take the issue forward.
At the forum
The labour minister at the time, Roberto Maroni, set up an Italian multistakeholder forum, replicating the EU-level model. A thinktank, the Italian Centre for Social Responsibility (i-CSR) was also established.
These efforts petered out after 2006, however, with few results beyond the publication of corporate responsibility guidelines. Public funding for i-CSR ceased in 2007. The thinktank still exists, but with a limited role. Manlio De Silvio of i-CSR says it is working on “the dissemination of good CR practices on issues such as occupational health and safety, lifelong education and work-life balance”. Its current projects concern “socially responsible initiatives for people with disabilities”.
The Italian government does have a directorate within the labour ministry that deals with “the third sector and social inclusion”. Corporate responsibility is part of its remit. The directorate’s head, Danilo Festa, says the emphasis remains on coordinating with EU-level initiatives.
In particular, in response to an updated European commission strategy on corporate responsibility, published in October 2011, the labour ministry will prepare an action plan “focusing on environment, disability, socially responsible procurement, work health and safety”, Festa says. The commission’s strategy marks a change in the official EU view of corporate responsibility, from being purely voluntary, to a more direct approach that could entail obligations for companies. It remains to be seen if Italy will follow suit.
No big stick
The Italian government fails to wield a big stick when it comes to regulations affecting companies. Enforcement of environmental laws is weak, for example. Long-running problems with waste in the south are a symbol of the Italian government’s failure to impose its will. Because of inadequate waste infrastructure, compounded by waste dumping and illegal landfilling by mafia groups, garbage regularly piles up in the streets of Naples and surrounding areas, causing health problems and environmental damage.
The government even struggles with vested interests over what should be relatively straightforward issues, such as companies’ reporting obligations. Italian listed companies are subject to a limited disclosure regime. Their main obligation when they publish annual reports is to take out newspaper advertisements to advise investors that the reports are available.
In 2009, the Italian stock exchange tried to remove the newspaper-advertisement obligation in favour of publication on the internet. It was hoped this would lead to greater transparency. But newspaper publishers, including companies owned by then prime minister Silvio Berlusconi, stood to lose significant revenue, and the move was blocked. Now that Berlusconi is out of the picture, the Italian stock exchange is making another bid for online publication.
An new look
It could be a sign of things to come. Francesco Perrini, a professor of management and corporate responsibility at Milan’s Bocconi University, says that although the government does not regulate corporate responsibility, the financial and economic crisis has forced Italy to look at things differently.
At present, there is a crisis to be managed, but thereafter the government will consider carefully what kind of growth Italy wants, and what this might mean for companies.
The answer will be more responsibility, Perrini says. “We are in a transitional period. The pressure from the crisis has put the focus on the need to redefine the way of doing business.” He confidently predicts a change. “We will have a new model of development based on sustainability”.