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Italy set to make sweeping management changes at state firms

Source: Reuters - Mon, 14 Apr 2014 11:46 GMT
Author: Reuters
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ROME/MILAN, April 14 (Reuters) - Italy is set to announce sweeping changes to top management at state-backed firms including oil group Eni and utility Enel in a test of Prime Minister Matteo Renzi's promises to tackle cronyism and promote merit.

Renzi, who took office by an internal coup in his centre-left Democratic Party in February, is expected to present the list of board members and managers for Italy's public companies after the stock market close on Monday.

The 39-year-old, nicknamed "Demolition Man" for his campaign for generational change, has pledged to shake up Italy's cosy elites as he strives to revitalise an economy struggling to emerge from its longest recession since the second world war.

He has promised more women executives and a departure from a nomination process at state-run firms that for years has been shrouded in secrecy, with top spots dished out via political horse-trading rather than acknowledged business expertise.

"We're ready with Enel, Eni and (defence company) Finmeccanica," cabinet undersecretary Graziano Delrio said in an interview with La Repubblica daily on Monday.

Government and industry sources have told Reuters long-standing Eni CEO Paolo Scaroni, originally drafted in to the group from Enel, will not be asked to stay on for a fourth term.

He is likely to be succeeded by company veteran and current head of exploration and production (E&P) Claudio Descalzi, who has helped focus Eni on lucrative resource discoveries.

"If Descalzi is named CEO (of Eni) the market would react positively since it's a business and not a political choice," one Italian oil and gas analyst said.

The 59-year old Descalzi has been at the company since 1981 and is one of the most respected E&P men in the business.

He became E&P head in 2008 and since then, commuting between London and Milan, has worked with Scaroni to focus Eni more on the lucrative E&P side of business, boosting time to market on projects, and strengthening the group's asset portfolio.

Experience is also expected to win the day at Italy's No. 1 utility Enel, where current CEO Fulvio Conti, also in his third term, is seen making way for Francesco Starace, currently at the helm of Enel Green Power, Enel's renewable power unit.

The 58-year old Starace, a nuclear engineer by training, is a former head of the utility's power generation business at the time Enel acquired Spanish utility Endesa.

The boards of groups such as Eni, Enel, Finmeccanica and power grid operator Terna are renewed every three years at shareholder meetings typically held in May.

In March the government sent a letter to state-owned groups calling for a tightening of corporate governance requirements as part of its drive to fight corruption. (Reporting by Stephen Jewkes; Editing by Lisa Jucca and Mark Potter)

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