that has received wide scholarly attention is family ownership. in general, family firms are characterised by lower agency exchanges and conflicts, resulting, on one side, in more information sharing between owners and managers and yet, on the other side, in more conservative decisions, often leading to less innovation and lower firm growth. – entrepreneurs play a key role, especially in new businesses, in introducing new products, processes and organisational approaches. however, they face the difficult task of choosing the appropriate managers. the potentially limited pool of talented managers can make for a lack of managerial skills, which is often behind the poor performance of even promising firms. – modern management practices deal with the design of monitoring and incentive schemes that are conducive to an efficient organisational structure. much of the productivity gaps, across firms both within and between countries, has recently been attributed to differences in management practices. what has, perhaps surprisingly, emerged is that their quantitative effects are comparable to those brought about by differences in r & d investments, in the adoption of information and communication technologies or in the level of education and skills of employees. • these issues require special attention from both policy - makers and the academic community and are particularly relevant for the italian economy. we know how extraordinarily large the number of small and very small enterprises in italy is. we also know that the share of italian family - owned businesses is similar to that of other european countries. however, the incidence of family management is remarkably higher in italy. in the selection of managers, family background, social and political connections often appear to hold more weight than competence, managerial skills and education. this also tends to hamper corporate performance due to the lack of openness to external talent and modern management practices, leading to lower firm efficiency and weak propensity to innovate. • the recent pandemic – a human tragedy with enormous costs for the economy and society at large – has impacted firms by inducing substantial and rapid changes in the business environment and in their activity. even if we still do not have a sufficient understanding of the lasting effects on sectors of activity and production patterns, there is no question that companies with a greater ability to adapt and swiftly re - deploy resources will experience higher chances of survival. in these extremely uncertain times, intangible capabilities – such as creativity, innovative thinking, and openness to change – will be crucial factors, highlighting the central importance of managers in leading the firm through the storm. there is indeed some very recent evidence to

the range of available assets considerably. it therefore places particular emphasis on researching new investment opportunities, whether these be equities, currencies or markets. hence, for example, the recent introduction of new currencies or the inclusion of additional countries, in order to better achieve a satisfactory degree of diversification. third challenge : investing our portfolio without influencing the markets. the rapid growth of our reserves required us to invest and reinvest large amounts. amounts of this magnitude can have an impact on the stock, bond or money markets. this is why the snb bis central bankers ’ speeches operates on the major markets and does not invest in niche markets. moreover, to ensure that our investments do not destabilise the markets, we place amounts which they can easily absorb. this implies that any diversification after a large inflow of foreign exchange reserves must be gradual. we are also engaged in active discussion with our partners, the central banks of the countries where we invest, and we are pursuing an information policy in this area that is as transparent as possible. fourth challenge : maintaining an optimal proportion of equities in our portfolio. despite the recent significant inflow of foreign exchange reserves, we have increased the proportion of equities, and it now stands at nearly 12 %. many observers of the snb ’ s activities have expressed a desire that this proportion be larger. yet such an increase is not without risk. while the inclusion of equities in a portfolio can reduce the risk profile as a result of the diversification effect, this is only true up to a certain level. we estimate this level of equities to be between zero and 5 % of the portfolio. while a higher share would naturally translate into a higher return on the portfolio, it would also mean incurring greater risk. any increase in the proportion of equities must therefore be analysed from two vantage points : return and risk. additional risk can run contrary to the criterion of security that the snb applies to its investments. let me now turn to the fifth and last challenge : managing exchange rate risk. the return on foreign exchange reserves essentially fluctuates in line with changes in local currency returns versus swiss franc returns. this exposure to exchange rate risk is the result of the snb ’ s monetary policy. it thus forms, so to speak, part the dna of a central bank ’ s activities in a small open economy such as ours. eliminating this risk would go against