Bank of Italy: Italy’s banks need to break up “old boys’ clubs” Boards
The Italian banking system has made progress on the change of its governance mechanisms but more work need to be done, according to Ignazio Visco, governor of Italy’s central bank.
Speaking during a conference in Rome, the governor (pictured) said banks are now more aware of their relevance and have implemented new solutions in line with market best practices.
However, he added, he expects further steps forward will be made, as some areas require greater efforts.
The level of executive pays is one of those. Visco said bonuses distributed by banks are not always coherent with the current economic crisis.
The governor added that banks with stronger risk control mechanisms in place and a more transparent governance are better placed to successfully react to new waves of financial crisis.
Finally, according to Visco, Italy’s banks need to break up “old boys’ clubs” in board rooms. Visco said banking boards must increase the number of women board members, and seek to diversify the experience and backgrounds of their members in general.