Italy appoints new names to lead state-backed businesses

Mario Draghi’s government has replaced the management teams at Italy’s state-controlled investment bank and public railway with seasoned executives as it seeks to revamp the management of state companies set to receive EU recovery funds.

Luigi Ferraris, former chief executive of utility Terna, will lead scandal-wracked railway operator Ferrovie dello Stato, while according to Treasury officials Dario Scannapieco, vice-president of the European Investment Bank, will head state-backed investor Cassa Depositi e Prestiti.

Nicoletta Giadrossi, Bain Capital senior adviser, has been appointed chair of FSI.

The moves are part of Rome’s broader plan to reshuffle the management of publicly-backed companies as their three-year terms expire this year, and billions in EU funds start pouring in.

CDP owns stakes in Telecom Italia, broadband operator Open Fiber, payments group Nexi and Borsa Italiana. It is also leading a group of investors in an attempt to take over Autostrade per l’Italia, the country’s main toll road operator. FSI controls most of Italy’s regional and high-speed railway network and motorway operator Anas.

According to Italy’s recovery fund plan sent to Brussels last month, more than €8bn is slated for digital, broadband and technological upgrades. Meanwhile, FSI is set to receive more than €25bn in EU funds over the next five years to upgrade Italy’s road and railway infrastructure.

The change at the helm of the railway operator had been expected amid investigations into insurance and IT contracts it took out and complaints that the company’s management had made poor strategic decisions.

But the replacement of the chief executive of CDP — in spite of good earnings results during the pandemic and the role it played in supporting Italian businesses — came as a surprise to many in political and business circles. 

One treasury official said the overhaul of CDP’s and FSI’s managements had been decided based on the professional qualifications of the candidates selected by executive search firm Key2People.

Fabrizio Palermo, the outgoing CDP chief, and FSI’s Gianfranco Battisti, were appointed in 2018 by former prime minister Giuseppe Conte’s populist government coalition. Both men had been backed by the Five Star Movement, the senior coalition partner, in an effort to purge Italian companies of establishment figures and managers appointed by the centre-left governments of Matteo Renzi and Paolo Gentiloni.

The appointment of Ferraris and Scannapieco, who worked with Draghi at the Treasury in Rome in the 1990s, represents the return of experienced managers at Italy’s publicly-backed companies. 

More changes are expected to be announced over the next few months. The terms of 74 boards of directors across 90 publicly-backed companies will expire before the end of the year. Fifteen of them are directly controlled by the Finance Ministry.