Van Gogh and the "Good Samaritan": when compassion becomes solidarity
The "Good Samaritan" is a painting Van Gogh made in 1890, the year of his death. A work that is part of the Dutch artist's sacred artistic background, where the action of the Good Samaritan who, with a determined gesture, offers his help to another man in distress, without sparing himself, is unequivocal and moving.
In the midst of a dirt road and sun-baked fields, the parable of "compassion," according to Luke's gospel, comes to life. A man with his sleeves rolled up, arching his back while helping himself with his leg, lifts the heavy body of his neighbor in an attempt to pull him to safety on the horse after a probable misadventure. The disheveled reaction of the needy man who with a bandage on his head clings to his rescuer, the considerable effort protracted by the latter, the heel lifting off from his shoe, are just a few details on which the viewer's attention is focused, making the experience of his own emotional involvement deeper and deeper.
What does this painting want to convey?
It is a message of true compassion that emerges with extraordinary force: it comes from thought and follows up with action. To help our neighbor, necessarily, we need to take on his or her difficulties and "wear" - so to speak - his or her pain, to truly understand him or her.
In today's society, which never has time to stop, the word compassion is in danger of sounding anachronistic, when it should be recovered and restored to its original dignity. Open your heart to compassion and do not close yourself off in indifference, is the exhortation Pope Francis assiduously addresses to the faithful around the world. His message, "giving back saves us from indifference," encourages us to walk the path of "true justice" by abandoning all forms of individualism. Beware, however: a compassionate choice should not be limited to conceiving of a simple emotional response to what affects us deeply at a certain moment, but must become a choice of method and responsibility. According to biblical theology, compassion is the element whereby God "sees" the suffering of the people and is prepared to intervene on their behalf (Exodus 2:23-25; 3:7). Compassion can take many forms.
Personally, I am a great believer in the value of education and, therefore, in providing opportunities for promising young people who are willing but lack means to have access to quality schooling. A solid education lays the foundation for the growth of future society, making it better prepared to deal with the processes of change and development that affect businesses, the world of work, lifestyles and, above all, man as the soul of the community.
In keeping with Fordham's mission, which is inspired by Jesuit thought, and specifically the meanings ascribed to the word "discernment," I believe that being compassionate means recognizing another's difficulty in order to remedy it unselfishly, without passing judgment.
The emotional relationship between those who help and those in need can only be constructive, as it helps both, fostering an attitude of hope while converting feelings into action. To help concretely is to sow a seed that will surely bear fruit in the future.
From energy crisis to shared responsibility: a possible step?
The global economy, already struggling to recover from the effects of the pandemic, is now facing another hard blow from what might be called the "energy conflict," a true parallel war to the military one already underway.
This is a new war, affecting Europe in particular, and one that requires rapid yet forward-looking decisions. The goal is to make member states increasingly autonomous in the sourcing and production of energy, managing its consumption in an increasingly conscious manner. Consider that Russia is our main supplier of energy derived from fossil fuels, such as: oil 29%, gas 43% and coal 54%. For the EU, therefore, the current conflict is of no small concern.
Seneca observed two thousand years ago: "The unexpected makes the burden of misfortunes heavier, nor is there any man who does not grieve more for a calamity that astonishes him. Therefore, nothing should come to us unexpectedly. We have to prepare the soul for everything and think not about what normally happens, but about what that could happen".
In our case, we see how the lack of forward-looking strategic market forecasting and international economic policy can create overly binding dependencies, making states weak in the face of unforeseen situations. Being forward-looking also means considering that, at least as far as gas is concerned, there are alternatives to Russia, but they are in countries subject to some risk of political instability and, therefore, not totally reliable in the long run. In contrast, for electricity, renewable sources currently cover only a very small part of actual needs. It is clear that we are traveling a long road, where there is still much to be done.
The European Union is running for cover with "Re Power EU," a package of measures aimed at accelerating the energy transition by stimulating large-scale, major infrastructure investments by member states. According to Ursula von der Leyen, the ambitious goal is to make themselves independent, by 2027.
Renewables are a valuable tool to focus on in the future, but the massive production of clean energy (photovoltaic, wind, hydrogen, etc.), requires a substantial infrastructure network that will require significant time and resources to implement. As with any infrastructure investment, I expect that these will also produce a flywheel effect, strategically virtuous, capable of involving a multiplicity of actors from the private sector, bearers of expertise and capital.
The real extent of this involvement, which could also expand to sectors not strictly related to the energy sector but related to it, will depend on the choices of the governments and various decision makers involved.
Today, in the global economy, the concept of "we are all responsible" applies, signifying that all leaders worldwide are called upon to act for healthy future development.
However, divisions remain and, unfortunately, the "distant positions" between the European Union and the United States of America compared with those of Russia and China (just to give an example), do not make it easy to reach common strategies toward which to strive.
However, it is to be hoped that the willingness of many states to take a bridging role in mending rifts and divisions will be able to build international relations that can share a common mission, perhaps starting precisely with energy security. Such an approach, would be an important step in leaving future generations with a healthier environment and a stronger economy.
SPAC: Veterans in the States, novices in Europe?
The recently concluded Ambrosetti Forum in Cernobbio once again brought the major issues of the moment, from the complexities of the geopolitical chessboard and fears of economic stagflation to risks and solutions for the future, to the attention of an international audience.
I am convinced that, in a context that has never been as complicated as it is today, the role of investment will remain a cornerstone. The question is always the same: how can we stimulate but also efficiently channel financial resources to profitable economic activities?
In this regard, I would like to devote a brief discussion to a very interesting investment instrument that has been active in the U.S. market for some time now, but, perhaps, that is still in the twilight in the European market. I'm referring to the SPAC, which stands for Special Purpose Acquisition Company. This is a mode of investment similar to classic private equity, but much more flexible and, for this very reason, it is gaining momentum in the States.
Despite being a tool that has been around for a few years, the European market, is still proving lukewarm to this mode of investment. This is not only proven by the figures, which are markedly undersized in Italy and Europe compared with the U.S., but also by the attention given to SPACs. Although they have existed since 2005 and arrived in Italy in 2011, they have never been the focus of financial debate.
It is hard to say what the coldness toward SPACs is due to. It is an instrument that offers several advantages, in the face of the risks typical of any investment in high-growth-potential and highly information asymmetrical realities. It should be mentioned that the only elements capable of determining the degree of risk of the operation undertaken through the SPAC are, on the one hand, the expertise of the investment promoters and, on the other hand, the strength of the bond of trust with the promoting partners, who are called upon to be credible and responsible figures, especially in the choice of the target company. Not surprisingly, the promoter is often an individual professional with extensive experience and an excellent reputation in the market.
SPAC is a vehicle that aims to aggregate investors to make investments in one or more target companies. There are four steps in the process: the establishment of the SPAC based on a project proposed by the promoter(s), the conduct of the IPO to raise capital, the search for the target company, and finally the actual investment transaction. The last step may not even take place if there is no longer the necessary consensus among the partners or there are problems with the target company. Once again, we see how it is crucial to rely on authority figures in this area who can operate wisely and as profitably as possible.
Perhaps Europe and Italy are not yet ready to make this leap, but the path is certainly the one already traced by the United States, where 50 percent of IPOs involve SPACs. A very large figure that demonstrates the potential scope of the phenomenon for the Old Continent as well.
At the moment we are in, with a war on Europe's doorstep, the price of energy commodities virtually out of control and economic growth that has become a major question mark, SPAC represents an arrow a plus that it is good not to leave unused.
Once again, the experience of the States can come to our aid and can be an example for the European context, not forgetting, however, that it is always skills and confidence that make the difference. Moreover, trust cannot go without a good reputation, substantiated by concrete actions.
Leadership today between stress and business
The events of recent years have shown us how the environment has become more complex, changeable and risky than in the past. I believe that this is not just a perception, but rather a true fact that will be a constant in the years to come. Events such as the pandemic and, more recently, the Russia-Ukraine conflict, have made it much more difficult to manage and understand market dynamics, which are systematically impacted by global events.
Such an environment can only bring anxiety and stress to those who have to make professional and business decisions on a daily basis, impairing their ability to assess and their readiness to act consciously. Our motivation, the energy that fuels the will to cope with life, be it on a personal or professional level, depends very much, in fact, on our psychological and physical well-being. How, then, can leaders protect themselves and their teams, avoiding the "somatisation" of sudden, concerning events?
Clearly, I do not claim to offer a solution in this short article, all the more so considering that anxiety and the effects of stress are a subject of study and research by experts in medical science and psychology. However, I can provide some insights, based on my experience as a businessman, having faced many situations in which I had to achieve a goal under huge pressure.
One strategy that I consider indispensable for a leader is being able to foster and maintain good relationships within the work team. This is because positive interpersonal relationships reduce, even by a great deal, the negative effects of stress that, in the long run, can lead to real over exhaustion.
However, the success of this strategy depends on the leader's interpersonal skills, i.e., his or her communication skills. In some cases, these skills are a predisposition of the individual; in others, they require dedicated learning. Trust, discipline, positivity, creativity and the ability to communicate through the correct management of emotions are all dialogic approaches that foster interpersonal relationships, improving their stability and durability. The skills required are: empathy, inclusive ability to share, listen and negotiate, and the ability to manage people by dealing with them in the most appropriate way. All of these certainly have beneficial effects on social relations, in terms of improved teamwork, harmony and cooperation. Not only that, but in an environment supported and motivated by an engaging network of relationships, each individual team member becomes a key player and, with it, his or her contribution to achieving the goal.
These skills have an important potential that, if well exploited, allows for a noticeable increase in the quality level of "professional environments", with significant effects on business results. A connection already amply demonstrated in the economic and scientific literature. The quality of relationships becomes, therefore, a strategic resource to be used in every sphere - personal or professional - where everyone contributes by interacting, each with his or her own skills, to achieve the common goal.
Capital to take off: airport sector and sustainable mobility
Assuming the position of Vice President of Albenga’s Airport has given me the opportunity to delve into the dynamics of a strategic sector for Italy, that of air transport, which is currently at the center of an important phase of change relating both to new policies focused on sustainability and to the consequences of the pandemic. In fact, the future development of this sector cannot be separated from a deep restructuring, which is especially required by the new scenarios of sustainable mobility, given also the high environmental impact of air transportation.
Let us not forget, firstly, that we are talking about a sector in great difficulty due to the pandemic and that was unfortunately neglected at this stage of restart. Despite a total inducement of between 3 and 6 percent of GDP (Assaeroporti data), the policy choice to set other priorities is quite evident in the implementation of the National Recovery and Resilience Plan (NRP), in which the airport sector was not considered.
This could be a short-sighted choice, which is likely to result in a real strategic mistake. Recall that, pre-pandemic, the sector had around 200 million travellers per year. A figure that, according to estimates, may be seen again, but no sooner than 2024-2025 (Enac data in "Social Report and Budget 2020"). The excellent recovery in 2021, at +52.5 percent over 2020, is encouraging, but let us recall that it is still 58 percent less than pre-covid (Enac data in "Traffic Data 2021"). So the recovery will be rather slow, but what role will sustainability policies play in this process?
The decision not to include air transport as one of the recipients of NRP funds is also dictated by European guidelines, with the clear discriminator of high impact from the environmental point of view, in favor of other means of transport deemed more "environmentally-friendly." However, the air sector is unlikely to be effectively replaced by other means of transportation, which is why it may make sense to ask about the most appropriate ways that can support its healthy development in the long run.
This is also confirmed by the words of Assaeroporti President Carlo Borgomeo: "At present, we are in a debt situation that does not allow us to self-finance projects on sustainability."
In fact, if we look at the ownership structures of Italian airports, there does not seem to be widespread interest from private investors, especially foreign investors, ready to "bet" on the sector. Current investors are mainly Italian, e.g., Atlantia and the F2i fund, in addition, of course, to public actors linked to the territory, such as municipalities and chambers of commerce. The NRP could have been a strong signal that could have attracted the attention of new Italian and foreign investors, bringing capital, skills and ideas.
In the airport sector, therefore, the new sustainable mobility may be slow to "take off," leaving a sector with important spillover effects at the territorial level and at the level of the national economic system untapped.
Purpose and leadership, an idea of sustainability
There is currently a lot of talk of the term “purpose”. In my attempt to interpret this term consistently with the vision of discerning leadership that I aim to convey to young business students, I see purpose as a new frontier of business that leaders are about to cross.
It is not news that, in this age of significant change, obsolescent business paradigms are giving way to new models, which are more sensitive to values and less devoted to the exclusive pursuit of profit alone. The shift in the relational dynamics between business and consumer is taking place and is changing the relationship between the market and the stakeholders therein.
We can say, with certainty, that today’s customer demand for goods and services is strongly influenced, not only by the desirability of the brand as such, but also by what the company offering it represents.
Today, consumer sensibility also goes far beyond mere functional or outward interest in the item on a supermarket shelf, involving every area of its production chain.
An approach that is now normal amongst younger generations. A large bibliography of authoritative statistical studies has, in fact, shown that the purchasing choices of Millennials and Generation Z, are strongly influenced by the brand’s ability to evoke the company’s commitment to other areas, which are not necessarily economic, commercial or related to the specific product offered.
Companies that adopt, as their “corporate philosophy”, a “brand purpose”, namely, companies that are attentive to these new consumer demands, are more easily able to engage customers and make them more loyal to the brand. This is because the “purpose mechanism” moves people’s will by significantly improving the principle of engagement, acting precisely on buyers’ “new awareness”. This means that consumers, today more than in the past, reflect on the meaning of their purchasing choices and the extended meaning of the product, assessing its multiple implications, in terms of the ideas, purposes and values embodied by the company that produces it; they want to feel part of a larger project, not just mere buyers.
Therefore, the purpose, namely, the reason as to why something exists, needs to make leaders reflect on the fact that obtaining profits is increasingly linked to the “meaning” conveyed by their brand as a contribution to improving the society in which they operate.
This is where discernment – by vocation – spurs them to find their essence, sensitizes them to issues, such as ethics and social relevance, in which consumers recognize themselves.
From this perspective, corporate culture is developed in a broader and virtuous sense at the same time, fostering social engagement, expressing concern for human issues, supporting inclusiveness and respect for the individual.
In essence, the purpose-driven content of a given brand does not aseptically represent a good or service, but rather describes its various implications, such as in the environmental, social, or ethical spheres and allows for the establishment of a vigorous emotional, empathetic and relationship bond with the end users, who feel the virtuous sense of the company’s purpose as their own.
In order for this bond of mutual interest to be truly profitable and lasting, I suggest that leaders conduct their enterprises by observing the true essence of discernment, shaping their activities consistently with the good intentions they themselves proclaim. Profit is not made today, but is made over time, building bonds that are, indeed, long-lasting and a model for future generations. Because this, too, is sustainability.
ESG criteria - Between investment and leadership
On February 8, 2022, the Italian parliament definitively approved a bill that includes protection of the environment as a fundamental principle of the Constitution.
Specifically, it amended the second and third paragraphs of Article 41 of the Italian Constitution concerning the exercise of economic initiative.
Without prejudice to the precept of the inviolability of human dignity, security and freedom, the second paragraph now also references the health and environmental issues that must always be observed and protected during the exercise of all economic activities. Thus, the law is increasingly focused on enhancing the principles of sustainability.
The financial field by now reflects this approach in the well-known "ESG" criteria, which increasingly permeate the activities of investors, financial institutions, entrepreneurs and companies.
Actually, if in the past investing according to these criteria was only an objective for specific thematic funds, or was an ancillary and rewarding principle, today it has becomes a functional element for the entire investment chain on which basis the individual risk level is determined.
Including "Environmental, Social, Governance" factors, the terms in the ESG acronym, in one's portfolio certainly improves the risk profile and optimizes long-term return.
So, specifically, what are they?
"Environmental" refers to the environmental factors related to climate change. This criterion seeks to raise awareness for protecting the environment, biodiversity and natural resources, while minimizing harmful emissions into our ecosystem.
"Social" considers the impact of a given activity on the social context where this work is carried out. Inclusiveness, equality, child labor are just some of the parameters considered in this criterion.
"Governance", on the other hand, evaluates the system by which a company is administered and governed. By verifying certain parameters, such as: economic strategies, the structure of the board of directors, executive remuneration, tax practices, corruption, abuse of office, respect for meritocracy, codes of conduct and various company policies, the risk and sustainability of different companies are assessed. This factor presently affects the creditworthiness of the individual company also and its attractiveness to potential investors, such as private equity funds.
In March 2019, the European Commission also reiterated, by issuing various regulations, the importance of encouraging the development of "responsible" companies and investments, thrusting them towards sustainability.
Value for the shareholders and market confidence are also achieved by integrating the "ESG" criteria in their own conduct and within their administrative, production and investment system.
In my opinion, these criteria are consistent with the aims of what I call - and I promote among the young students at the Gabelli School of Business - discerning leadership. Leaders today must contribute to building a virtuous "biosystem", where business and profit combine with sustainability and inclusiveness.
New skills for new alternative investments
As was emphasized in a previous article, private markets, alternatives to the traditional assets listed on the market, have entered the awareness and convictions of investors. Strengthened through their limited correlation to financial market performance, they can offer very interesting profits, especially during periods of high stock market volatility and market stress, even in this time of fluctuation due to the continuing economic fallout of the pandemic. It is no coincidence that this market today represents a rapidly growing trend, from both sides, of qualified investors who are selecting it and Italian small and medium-sized enterprises comprising its main users.
This is the reason that I believe in-depth training on this topic is fundamentally important for economics students and future business leaders, whose solid preparation in this matter could confer great professional satisfaction. In a global and complex context like this one, keeping up with the times is an obligation, and private markets represent a strategic area with great potential for young people who want to invest in their skills.
What skills are these?
Based on my experience, certainly the most important is mastery of the technical skills in the field of finance, including aspects linked to the variety and management methods of the instruments available in this new sector.
The ability to evaluate the most diverse businesses must be included in order to recognize the most interesting investment opportunities. This means having information on the target realities, in terms of strategies and growth plans and, no less, it also means knowing how to evaluate the skills of key persons for success in that specific activity. In addition to the technical knowledge, refinement is not to be underestimated in the mindset required of new business leaders operating in this sector, whose positive attitude can make the difference in finding adequate answers to different situations.
In any case, those with leadership positions in the market of alternative assets must act as a guide capable of inspiring: listening and communication are basic skills that cannot be lacking. Often, it is precisely personal qualities, such as a good name and reputation, that attract capital and enable the investment operations to take place. Knowing how to communicate by transmitting trust, reliability and authority thus becomes a success factor, just like technical skills.
Young business students have to be well aware that good relationships and a good reputation are built day by day, in a career devoted not only to the pursuit of profit, but also to one's professional and personal improvement. Improvisation never pays. It is study, commitment, perseverance and passion that allow us to reach our goals, which must also include - as I often repeat - discernment, meaning the habit of reflecting before acting. All these resources combine to translate a vision into reality.
Private markets and collective benefits
The last 20 years of evolution of modern society have been marked by epochal events that have strongly influenced economic choices and financial strategies.
The internet, the digitization of production processes, artificial intelligence, the start-up and fintech phenomenon, globalization and continuous metamorphosis of international geopolitical assets have radically changed our way of "doing business". Investors and entrepreneurs have had to adapt quickly to sudden events, not least the pandemic, that can completely change the status quo.
However, the one constant remaining for entrepreneurs in this continuous change of events is the need to raise funds and, for finance, to find new advantageous formulas for the use of capital.
One alternative area offering new investment opportunities than those more traditional and where lifeblood may be drawn is certainly the private markets, particularly interesting now for channeling resources towards SMEs.
Private markets, starting in the United States and subsequently landing in Europe, are arousing strong interest both on the Old Continent and in Italy, where they are spreading in a very lively manner. These are investment solutions designed for finance companies not listed on regulated markets and, therefore, more difficult to know and less accessible for investors. A method that is very well suited to small and medium-sized companies with significant growth potential and for private investors looking for long-term profitable investments for their capital.
Private equity, private debt and venture capital are generally the best known instruments. In the case of private equity, the investor, usually a fund that has first raised capital from private and institutional investors, provides capital to selected companies with significant growth prospects, bringing resources and know-how to improve their development plans and results.
In venture capital, investors take equity stakes in the company to support its start-up or even expansion phase.
Private debt, on the other hand, includes investments of a bond nature issued by unlisted companies to finance strategic and development activities. The flourishing of further private asset formulas, such as invoice trading, minibonds, direct lending and other similar products, clearly demonstrates how the Italian economy is receptive to following alternative paths favoring the delicate balance between capital and business.
What are the benefits? First of all, these are investments unaffected by market fluctuations that have a medium/long term duration. Another interesting prerogative is investment stability; in fact, investors cannot arbitrarily "disinvest" their capital, as it remains bound to the established deadline. This is a condition allowing the company to carry out its development plans and create value.
The investments required are always substantial and are riskier than other traditional instruments. This is why they are reserved for professional investors, able to better evaluate this type of commitment and also support the company by bringing experience, expertise and opportunities through their network.
Without a shadow of a doubt, therefore, private markets in Italy are also a very interesting growth lever that is gaining momentum, as can be seen from the data from the private equity and venture capital collection which in 2020 recorded a growth of 32% over 2019.
Entrepreneurs and investors thus have a great variety of instruments and options at their disposal as an alternative to banking, which provides more dynamism and opportunities to the market.
The need, now, for entrepreneurs and investment bankers, is precisely this, to foster a synergistic relationship between entrepreneurship and finance, between business and capital which, through new development models and new financial instruments, can support the changes taking place with a discerning perspective, anticipating the future and enhancing the Italian economy.
Cybersecurity, a priority for leaders today. Not only operational and financial risks any longer
Humans have always had to provide for their own security to protect themselves from impending threats and dangers by investing in energy and capital. Over the centuries, the concept of security has evolved with the times: if the ancient Romans protected themselves with fortifications and weapons, today the battlefield has expanded into the technological sphere, as digitization systems are advancing and now involve every area of human activity.
In fact, the Internet allows organizing business production processes of (just about) any kind, to administer government, institutional and professional platforms and manage financial flows globally. The imperative now is: "saving time to be more efficient" by speeding up all the management and production processes.
However, every digital process, resource, database or virtual platform is vulnerable to cyberattacks, such as Ransomware, Phishing, Malware, Social engineering viruses, Adware, Spyware and Worms.
The damage caused each year by these attacks is extensive, ranging from theft or loss of sensitive data to extortion, identity theft, intrusion into critical infrastructure or government processes and breaching banking systems. According to estimates by Canalys, a leading technology industry analytics company, approximately 30 billion data points were stolen in 2020 alone, more than from the past 15 years combined.
The problem has global significance. The World Economic Forum has recently defined cybersecurity as a priority activity on the agenda of the leaders of all nations, not only for the economic implications, but also for social impact. Cyber defense includes various types of countermeasures. These include a new generation response proving to be very effective, Artificial Intelligence which, by using specific algorithms, recognizes the "normalcy" of a digital environment, detecting any alteration caused by possible attacks, immediately protecting the area of relevance assigned to it. This intelligent system, which is likely to be used increasingly by governments and large corporations in the future, is estimated to act at least nine times faster than a team of people assigned to the same task.
Thus, cyber risk has become an issue that CEOs must make a top priority. Without international security protocols for reference, it is crucial to provide training that adequately prepares leaders and their collaborators in the basic principles of cyber security in order to provide companies with adequate defensive tools.
In today's connected world, digital transformation is a crucial challenge for today's leaders tasked with reviewing their business models and operational architectures to adapt for security in their information infrastructures. Awareness of this subject is growing steadily, as shown also in a Canalys report "Now and Next for the cybersecurity industry," attesting a 10% growth in cybersecurity investments in 2020, at 45.2 billion euros.
Technology, pervasive and eclectic, has allowed us to create operations that we thought impossible until recently. The net has "shortened the distances"; it has given us speed and efficiency and, as a function of this, our way of doing business has radically changed.
Cyber space is therefore a "great virtual crossroads" full of opportunities that every leader should be able to seize, with the awareness, however, that there are significant risks, which must be addressed with the same attention as financial and operational risks.