Perhaps, in a country like Italy, it could not have been any other way. A country where Family, in all its various declinations, is alternatively flaunted as a value, brandished as a weapon of blackmail or used as an alibi for behaviour that is hardly edifying. But, after taking a look at the data, if even a tiny bit of surprise was left, all remaining doubt has now vanished.
Every year, in Italy, over 200 billion Euro are handed down thanks to legacies and wills and this trend is constantly growing. If, in 1995, they accounted for 8.4% of the national income, this figure had reached 15.1% by 2016. The same increase may be observed if the flow is calculated in proportion to the income available for Italian families, which rose from 9.16 to 18.5%. Two economists, Salvatore Morelli and Paolo Acciari, have highlighted this fact: by studying the data in declarations of inheritance, they have isolated a trend, similar only in France, with 15% of the national income being transmitted through inheritance. The levels in Germany and the UK are much lower, being respectively around 11 and 9%. There is also a geographical factor involved: the average gap between the centre-north and the south of Italy, regarding the amount of testamentary bequests is around 125 thousand. Then there is also a question of gender: although the gap is closing, the two economists have noted, women still leave on average 50/60 thousand Euro less than men (source here).
We all know, even if only through our own personal experience, that it is economic issues that spark off often uncontrollable instincts. Money reveals people’s hidden natures, mostly invisible even to the people themselves. It affects family dynamics, creating tension and quarrels which may go on for decades. But what happens when these mechanisms affect companies, whether publicly traded or not, which have responsibilities towards their stakeholders? Can good governance, generated by precise and unbiased criteria, effectively combat destructive human tendencies? In the recent years of ESG, it must be said that the Environmental component of the “trio” has received the greatest attention, leaving Governance deprived of instruments with which to face a series of crises. The issue is an especially burning one in Italy where family business is a particular characteristic of the country.
Every year in Italy, over 200 billion Euro are handed down thanks to legacies and wills and this ... [+]
But also, because the legal context is extremely inflexible. Here, no-one could do what Warren Buffet did when he declared that he wanted to solve his problem of inheritance by donating 99% of his wealth. And if Rupert Murdoch were in Italy, he could not decide to which child or wife, and how much of it, to entrust the future of his media empire. Because, exactly as happens in families, company patrimonies are subject to the Law governing Legitimate Inheritance which guarantees people with close family ties the right to part of an inheritance, proportioned and defined according to the Law. Any choices made outside the established framework will put companies dangerously at risk of long legal disputes. This happened, for example, in Bologna when the business owner of a factory producing automatic gates, with a 200 million turnover and 1000 employees, decided to leave his little empire to the Curia. A legal battle ensued between the Curia and aunts and uncles, grandchildren and cousins who, in this case, did not come out of it well. Today the company is a multinational working towards reaching a turnover of one billion Euro, but which might equally have emerged broken from the conflict. Or, to give another example, the result of the legal battle declared by Margherita Agnelli against the children of her first marriage concerning the inheritance of Gianni, and hence of FIAT, has yet to be determined. It all depends on whether Italian law or Swiss law prevails. And we still have to see what battles will ensue over recently revealed legacies.
Families and organizations, however, are two very different categories with burdens and responsibilities that cannot be compared. For this reason, it is to be hoped that organizations will be protected from these dynamics, because of their collective role, aimed at the common good.
In this sense, alongside the already existing Family Act for Business, which is conditioned by the present norms of succession, a reform of the Law governing Legitimate Inheritance institute should be enacted. Indeed, this has previously been demanded several times in the past by entrepreneurs, in order to better manage the handing over from the older to the younger generations which, in the past, has so often caused the demise of successful businesses. Without taking cover behind the claustrophobic interest of some “chromosome-dependent” right. We should also forget the hypocritical metaphor of the “Good Family” when talking of organizations. The CEO is not the head of a family, s/he is the head of a company, and, in that capacity, must manage various interests: those of the shareholders, of employees, of the market and much else, without, if possible, becoming embroiled in the divided affections and manipulation of feelings and which are so typical of the family ambience. The Family should not be solely subjected to criticism but it cannot be an organizational model for businesses desirous of performing in a sustainable way on today’s market. So, please, let us leave family logic to the personal and private area and get back to organizations, with greater transparency, courage and authenticity.
