Corporate Governance: Italy

ITALY
CORPORATE GOVERNANCE

1. What are the most common types of within the latter and composed of independent directors.
corporate business entity and what are the The two-tier one is characterized by the presence of a
shareholders meeting, a supervisory board and a
main structural differences between them?
management board, whose members are appointed by
Leaving aside partnerships (società semplice, società in the supervisory board.
nome collettivo and società in accomandita semplice)
and partnerships limited by shares (società in
Joint stock companies shall also appoint an accounting
accomandita per azioni), Italian companies are in most auditor, acting in compliance with Legislative Decree
cases incorporated and operating as corporations, i.e. 39/2010, provided that the board of statutory auditors
limited liability company (società a responsabilità may act as accounting auditor, conditional to: (i) the
limitata) or joint stock company (società per azioni). company not being required to consolidate the accounts
of other entities, (ii) the company not being a listed or
Shareholders of both limited liability companies and joint supervised entity, (iii) all statutory auditors being
stock companies are granted with limited liability (i.e. enrolled with the Register of Accountants.
the risk is limited to the investment).

Private companies are usually incorporated as limited 2. What are the current key topical legal
liability companies – especially if closely-held small and issues, developments, trends and
medium-sized enterprises (SMEs) – or joint stock challenges in corporate governance in this
companies. Public companies, i.e. companies with shares jurisdiction?
admitted to trading on a regulated market, are typically
incorporated as joint stock companies (as limited liability Shareholder activism and engagement have kept
companies cannot be listed). growing and gaining strength in the past years.
Following the national implementation of Directive (EU)
It is worth noting that, while joint stock companies issue
2017/828 as regards the encouragement of long-term
shares, limited liability companies issue “quotas”, which
shareholder engagement (Shareholder Rights Directive 2
are not securities from a legal standpoint.
or SRD 2), which occurred mid-year with Legislative
The key corporate structure of both limited liability Decree 49/2019, we expect such trend to increase even
companies and joint stock companies is as follows: more in the Italian financial markets, also in light of the
coming into effect of the new Corporate Governance
shareholders general meeting (assemblea dei Code for listed companies (the CG Code, adopted in
soci); January 2020 and effective from 1 January 2021) issued
board of directors (consiglio di by Borsa Italiana S.p.A. (the Italian stock exchange
amministrazione) or sole director management company).
(amministratore unico);
board of statutory auditors (collegio On a different note, we expect companies and regulators
sindacale) (see point 13 below). to focus on the interactions between innovation and
corporate governance (e.g. crypto-assets, FinTech, AI
Joint stock companies may also opt-in – by means of an and technology within the corporation, etc.). We also
explicit by-laws provision – for implementing one-tier expect a further spreading of remote corporate
(monistico) or two-tier (dualistico) corporate governance meetings, non-at-meeting voting methods (see point 4
systems. The one-tier system is characterized by the below), with the support of innovative tech-tools.
presence of a shareholders meeting, a board of directors
and a committee on management control, operating Finally, strengthening corporate governance will be of

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 Corporate Governance: Italy

pivotal importance for Italian companies (listed and non- of corporate suits against directors and statutory
listed), with a specific focus on internal control systems auditors, (iii) approval of financial statements and
and procedures, as well as regulatory/compliance distribution of profits, (iv) share buyback programs, (v)
schemes, such as those related to the liability of legal amendments to the by-laws, (vi) mergers and
entities for crimes committed in their interest or to their demergers, conversions, (vii) etc.
advantage (under Legislative Decree 231/2001), data
protection (under the General Data Protection Regulation Meetings operate based on the majority principle,
and its national implementing and supplementing provided that the by-laws may provide for the existence
measures), whistleblowing, IT and cyber risks, AML. and issuance of special classes of shares, granted with
certain rights or obligations (see point 18 above). The
applicable quorums and majorities are to be determined
3. Who are the key persons involved in the based on: (a) type of company (listed or non-listed), (b)
management of each type of entity? type of meeting (“ordinary” or “extraordinary”), (c)
calling (first or second), (d) super-quorums and/or
The key persons involved in the management of joint majorities set forth under the by-laws, if any.
stock companies and limited liability companies are
usually as follows: With reference to both shareholders and board
meetings, the by-laws may opt-in for: (i) remote
the governing body, which may be either a meetings, i.e. audio/video attendance to meetings,
board of directors or a sole director (or a and/or (ii) non-at-meeting voting methods, i.e. by mail or
management board in case a two-tier system electronic means, provided in any case that a formal
is in place) (see point 1 above); meeting shall be called.
managing director (amministratore delegato),
who usually serves on the board (see point 6 Only limited liability companies’ by-laws may also
below); provide for written consent or circular resolution
the committees established within the board instruments.
of directors (see point 6 below);
key managers, such as the general manager
(direttore generale) and officers (CFO, COO, 5. What are the principal sources of
CIO, CTO, etc.), if appointed (see point 6 corporate governance requirements and
below). practices? Are entities required to comply
with a specific code of corporate
4. How are responsibility and management governance?
power divided between the entity’s
Corporate governance requirements are regulated, inter
management and its economic owners?
alia, under the Italian Civil Code and, as regard listed
How are decisions or approvals of the companies, the Consolidated Financial Act (Testo Unico
owners made or given (e.g. at a meeting or della Finanza or CFA), as well as other relevant laws,
in writing) regulations and best practice guidelines, such as the CG
Code.
Management matters are reserved to the exclusive
competence of the board of directors (Art. 2380-bis, par. Adherence to the CG Code is not mandatory. However,
1, ICC) and shareholders are prevented from resolving the company shall inform the public of the compliance to
upon any management matter, even though certain the latter on a yearly basis, under a comply-or-explain
exclusions apply to limited liability companies under Art. regime (Art. 123-bis, par. 2, CFA).
2479 ICC.
Corporate governance requirements of banks and
Shareholders general meetings are “ordinary” or financial institutions are regulated under the relevant
“extraordinary”, depending on the items to be supranational rules (e.g. EU ones), the CFA, the
addressed, and meet at first and second calling (prima Consolidated Banking Act (Testo Unico Bancario or CBA),
and seconda convocazione). the Private Insurance Companies Act (Codice delle
Assicurazioni Private or PICA) and the relevant
The shareholders meeting is entitled to resolve upon the implementing regulations.
matters granted to its competence by the applicable
laws and regulations, which most significantly include: (i) Specific provisions apply to state-owned entities, non-
appointment of directors and statutory auditors, (ii) filing profit and social entities and companies, etc.

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 Corporate Governance: Italy

The above is without prejudice to supranational soft-law Non-listed and non-supervised entities are not required
rules and guidelines (e.g. the G20/OECD Principles of to implement any committee structure, therefore it is to
Corporate Governance and the Basel Committee on the by-laws or the board discretion to do so. Listed
Banking Supervision Corporate governance principles for companies – pursuant to, respectively, Regulation no.
banks). 17221/2010 issued by the CONSOB (the Italian securities
and markets authority) and the above mentioned CG
Code – and banks – pursuant to Circular no. 285/2013
6. How is the board or other governing
issued by the Bank of Italy – shall appoint the following
body constituted?
board committees: related party transactions,
appointments, remunerations and risks (the latter in
The default corporate governance system is the so-
called “traditional” one, which is the most commonly listed companies is called “control and risks”).
used. As mentioned above, joint stock companies may
Day-to-day activities and coordination with the
also opt-in – by means of an explicit by-laws provisions –
management structures of the company, the governing
for implementing one-tier (monistico) or two-tier
(dualistico) corporate governance systems (see point 1
body usually appoints a general manager (direttore
above). generale) and officers (CFO, COO, CIO, etc.), who are
generally employees of the company and do not serve
In the event that a board is appointed (i.e. not in the on the board. They usually report directly to the
case of a sole director), pursuant to Art. 2381, par. 2-3, managing director and/or the board.
ICC, all or part of its powers may be attributed to: (a)
one or more individual members, acting as managing
director(s), and/or (ii) an executive committee. In such 7. How are the members of the board
case, the managing director(s) or the executive appointed and removed? What influence do
committee shall report to the board – at least on a semi- the entity’s owners have over this?
annual basis – on the general management of the
company, the most significant transactions/events of the Pursuant to Art. 2383 ICC, the members of the board of
relevant period (with respect to the company and the directors shall be appointed by the ordinary shareholders
subsidiaries) and the foreseeable evolution of the meeting, which is also exclusively competent in
business. removing them. The removal may be discretionarily
resolved upon by the meeting, provided that in the event
It is worth noting that the board shall have the right to
that there is no just cause for removal, the removed
recall the attributed powers at its sole discretion,
directors shall have the right to sue a claim for damages.
provided that in the event that there is no just cause for
Ordinary quorums and majorities apply to the
recalling said powers, the relevant managing director(s)
appointment and removal of directors (see point 4
or executive committee shall have the right to sue a
above).
claim for damages.

Typically, the leadership is entrusted with a sole The term in office shall be of maximum 3 financial years.
managing director (amministratore delegato).
It is worth noting that, inter alia: (i) special classes of
It should be stressed that the chairperson – even if non- shares may be granted with certain rights in relation to
executive – is granted with significant rights and powers the appointment of directors, such as veto rights or the
under Art. 2381 ICC, such as calling board meetings, right to appoint (autonomously) a certain number of
defining the items on the agenda, ensuring that the directors, (ii) each holder of a participating financial
directors receive all necessary information for the instrument (strumento finanziario partecipativo or SFP)
purposes of resolving on the matters to be addressed by may be granted with the right to appoint an independent
the board. director under Art. 2346, par. 6, ICC, provided that the
majority of the board shall be appointed by the
Also, committees serving specific functions or tasks may shareholders meeting.
be established within the board, either discretionally
(non-listed and non-supervised entities) or mandatorily Moreover, listed companies shall mandatorily apply list-
(listed companies, banks, financial institutions, etc.). voting mechanisms aimed at granting the appointment
Such committees may be executive (i.e. be granted by of at least 1 minority director.
the board with autonomous management powers) or
non-executive (i.e. serve preliminary or advisory
functions). 8. Who typically serves on the board? Are

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 Corporate Governance: Italy

there requirements that govern board 9. What is the role of the board with
composition or impose qualifications for respect to setting and changing strategy?
board members regarding independence,
As mentioned, management matters are reserved to the
diversity, tenure or succession?
exclusive competence of the board of directors (see
point 4 above), including the activities related to
SMEs and closely-held companies are typically managed
strategy setting and changing. The strategy is usually
by the majority shareholder or a trusted representative
defined by the managing director or the executive
of the latter, who usually acts as managing director
committee; the board is in any case competent in
(amministratore delegato) and/or chairperson. Public and
examining the strategic plan, if any (Art. 2381 ICC).
large companies are typically managed by non-investor
professionals, while majority and qualified-minority The corporate strategy shall in any case be compliant
investors hold offices as non-executive chairperson or with the applicable laws and be aimed at pursuing the
directors. purpose of the company, as set forth under the by-laws
(Art. 2380-bis ICC).
In any case, pursuant to Art. 2382 ICC, one cannot be
appointed as director – and, if appointed, terminates
from office automatically – if he/she is: (i) interdicted, (ii) 10. How are members of the board
incapable, (ii) declared bankrupt, (iv) prevented from compensated? Is their remuneration
carrying out public offices or executive directorates. regulated in any way?
Further suitability requirements apply to those holding Board members may be compensated in a variety of
offices as directors of listed companies, banks and ways, ranging from a fixed annual remuneration, to
financial institution, provided that the by-laws may stock option plans, from stock grants, to direct profit-
voluntarily set forth specific requirements (Art. 2387 sharing mechanisms.
ICC).
It is worth noting that the compensation shall be
With reference to independence: (i) listed companies’ resolved upon by the shareholders meeting, even
board of directors shall include at least 1 or 2 though the board itself may grant further compensation
independent directors, depending on whether the board to the benefit of the directors holding particular offices
is composed of up to or more than 7 members (e.g. managing director, chairperson, committee
(“independence” is defined under Art. 147-ter and 148 members, etc.), provided that the shareholders meeting
CFA and the CG Code), (ii) banks’ board of directors shall shall in any case have the right to set out an aggregate
include 25% of independent members (“independence” maximum amount (Art. 2389 ICC).
has been recently defined by Ministerial Decree no.
169/2020). Specific rules are provided for: (a) listed companies, as
the CFA and the CG Code sets forth a number of
Statutory diversity requirements are provided for: (a) principles and recommendations on the remuneration of
listed companies, which shall reserve at least 2/5 of the board members and top management, and (b) banks,
board seats to the least represented gender, and (b) which shall comply with the mandatory rules under the
banks, which shall ensure the appointment of board EU Credit Requirements package, the CBA and their
members with an adequate degree of diversity of relevant implementing guidelines and regulations (inter
competences, background, age, gender, alia, Circular no. 285/2013 issued by the Bank of Italy).
internationalization, in compliance with their diversity
policies (the CG Code provides for similar soft-law rules Specific provisions apply also to insurance companies
for listed companies). As regard banks, a minimum and other financial institutions.
threshold of board seats reserved to the least
represented gender is expected to the come into force in
11. Do members of the board owe any
2021 (the Bank of Italy launched a consultation in late
December 2020).
fiduciary or special duties and, if so, to
whom? What are the potential
No mandatory provisions are set out as regard consequences of breaching any such
succession plans. With regard to listed companies, the duties?
CG Code provides that succession plans should be
implemented for the managing director, executive Directors’ duties and responsibilities are governed – as a
directors and top managers. general rule – under the ICC.

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 Corporate Governance: Italy

On the one hand, directors shall act in a loyal manner, as courts from plunging into the merits of managerial
Art. 2390-2391 ICC sets forth that they shall not: (i) carry evaluations, courts are not prevented from evaluating
out any activity in competition with the company (unless whether the decisions of the directors have been taken
so authorized by the shareholders meeting), (ii) use for with gross negligence or reckless disregard and/or with
their own advantage or the advantage of third parties the actual awareness that said decisions would cause a
any information (including information on business prejudice to the company.
opportunities), of which they become aware as a
consequence of their office and that might be exploited Specific provisions apply to banks and financial
by the company. Moreover, Art. 2391-bis ICC and its institutions.
relevant implementing measures set forth specific rules
applicable to listed companies’ related party
transactions (scope of application, thresholds, 12. Are indemnities and/or insurance
procedures, whitewash, etc.). permitted to cover board members’
potential personal liability? If permitted,
On the other hand, pursuant to Art. 2392 ICC, directors
are such protections typical or rare?
are under a general duty to: (i) carry out the
management of the company in accordance with the Ex ante indemnities and limitations of liability are
applicable laws and regulations, as well as the by-laws, generally not permitted to cover board members’
(ii) act with the degree of care (diligenza) required in potential personal liability (see point 11 above), as
relation to their office, their professional skills and the
limitations or waivers to directors may be granted only
particular features of the company.
by means of an ex post shareholders meeting resolution
(Art. 2393 ICC).
Also, as a general rule, the directors shall define,
approve and implement an organizational, management
The company may enter into D&O insurance policies for
and accounting structure suitable in light of the
protecting board members against such potential
company’s purpose and dimension. Said structure shall
liability. Insurance protections are commonly used only
also be fit for timely discovering distress/insolvency
by listed companies, banks and financial institutions,
situations and monitoring the going concern of the
especially if part of international groups. Otherwise they
business (Art. 2086 ICC).
are still quite rare.
In case of breach of the mentioned duties of loyalty
and/or care, directors shall be jointly liable towards the
13. How (and by whom) are board
company for any damages caused by or deriving from
their negligence, with the exclusion of the powers
members typically overseen and
attributed, as the case may be, to the managing director evaluated?
or the executive committee, if any.
Management activities are primarily overseen by: (i) the
However, non-executive directors are not totally exempt board of directors as a whole (especially in relation to
from liability. In case the relevant member: (a) strategic decisions and high-level management), the
negligently fails to obtain data or information from the managing director(s) and/or the executive committee,
managing director or the executive committee, or (b) and (ii) the board of statutory auditors (compliance with
knew that a detrimental action was being carried out, the law and the by-laws).
but did not do his/her best to prevent or limit the
consequences thereof, he/she shall be jointly liable with The board of statutory auditors is a corporate body
the managing director or the members of the executive composed of professionals independent from the
committee. company and its management, which is entrusted with
internal control functions; limited liability companies
It should be noted that the so-called business judgement shall appoint a board of statutory auditors or a sole
rule applies. Namely, directors shall not be held liable for statutory auditor only if certain dimensional thresholds
any damages suffered by the company, provided that are triggered, the company controls an entity subject to
the latter are part of the range of choices that could be mandatory accounting audit and/or it consolidates the
considered ex ante as potentially advantageous (or in accounts of other entities (Art. 2477 ICC, as recently
any case harmless) for the company by a person having amended).
the standard of care and knowledge which could be
expected from the director of a company operating in Managers evaluation shall be discretionally defined and
the same business sector. It is worthwhile noting that, carried out by the board of directors, internal evaluation
even though the business judgment rule prevents the functions and senior management (e.g. CEO, COO, HR).

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 Corporate Governance: Italy

It is worth noting that listed companies, insurance 16. What financial and non-financial
companies and banks’ board of directors shall conduct information must an entity disclose to the
auto-evaluations on a periodic basis, respectively, under public? How does it do this?
the CG Code and Circular no. 285/2013 issued by the
Bank of Italy. As regard financial information, joint stock companies
and limited liability companies shall file with the Register
of Companies their yearly financial statements, within 30
14. Is the board required to engage days from the approval by the shareholders meeting
actively with the entity’s economic (see point 20 below). Financial statements approved by
owners? If so, how does it do this and the shareholders meeting, once filed, are available to
report on its actions? the public.

On the one hand – with the aim of preserving corporate Listed companies shall also disclose semi-annual
financial statements and may opt-in for extending such
secrets and the exclusive governance competence
disclosure regime also to quarterly financial information.
vested into the directors – shareholders of joint stock
companies are not granted with the right to engage with As regard non-financial information, non-listed entities
the board of directors for the purposes of being informed are not required to disclose business information to the
of the business activity of the company. public, other than the required corporate disclosures to
the Register of Companies, such as: (a) corporate seat
On the other hand, holders of quotas of limited liability and purpose, (b) number and characteristics of the
companies are granted with the individual right to ask issued shares or quotas, (c) names and data of (i)
the board of directors for any information on the shareholders, (ii) members of the corporate bodies
business activity of the company (Art. 2476, par. 2, ICC). (directors and statutory auditors, with indication of those
holding managing director or chair functions, as well as
The latest version of the CG Code explicitly states that their date of appointment and term in office), (iii)
the board of directors shall assess the opportunity of accounting auditor, (iv) entity carrying out management
engaging with the shareholders and the other relevant and coordination activity (direzione e coordinamento)
stakeholders. As regard banks, similar rules on over the company.
engagement with shareholders are expected to the
come into force in 2021 (the Bank of Italy launched a On a yearly basis, listed companies shall disclose their
consultation in late December 2020). compliance to the CG Code provisions, pursuant to Art.
123-bis, par. 2, CFA (comply-or-explain).

15. Are dual-class and multi-class capital Moreover, while listed companies shall comply with the
structures permitted? If so, how common disclosure duties under Regulation (EU) no. 596/2014 on
market abuse (Market Abuse Regulation or MAR), certain
are they?
large undertakings and groups (even though non-listed)
The by-laws may provide for the existence and issuance shall comply with those under Directive 2014/95/EU as
of special classes of shares, granted with certain rights regards disclosure of non-financial and diversity
information, as well as the relevant national
or obligations, e.g. (i) multiple-voting rights (up to no
implementing laws and regulations (see point 24 below).
more than 3 votes per share) or limitations/conditions to
the exercise of voting rights, (ii) specific rights regarding Specific provisions apply to banks, insurance companies
the distribution of profits or the apportionment of losses, and financial institutions.
(iii) rights or obligations relating to the transferability of
the shares (lock-up, pre-emption, right of first offer, drag
and tag-along, etc.), (iv) prior approval or veto rights on 17. Can an entity’s economic owners
specific matters to be resolved upon by the general propose matters for a vote or call a special
shareholders meeting. meeting? If so, what is the procedure?
Multi-class capital structures are commonly used by Pursuant to and subject to the limitations under Art.
start-up companies, as well as in private equity and 2367 ICC, shareholders holding at least 10% of the
other tailor-made investment schemes, with the aim of corporate capital (or 5% in case the company is listed)
protecting the position and the investment of specific shall have the right to request the directors to call a
shareholders. They are not common in listed companies. shareholder meeting, for the purposes of resolving on

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 Corporate Governance: Italy

specific items. The meeting can only resolve on the year (1.8% and 18.7% of the share capital,
matters reserved to its competence (i.e. the respectively)’.
shareholders are prevented from resolving upon any
management matter, which is reserved to the directors’ It should be noted that the national legal framework has
exclusive competence). been recently supplemented with the relevant
implementing measures of the provisions under the SRD
The same rule applies to investors holding quotas 2.
amounting to at least 1/3 of the corporate capital.
Namely, the newly-implemented Art. 124-quarter seq.
As regard listed companies, Art. 126-bis CFA grants the CFA set forth that asset managers and institutional
shareholders representing at least 2.5% of the corporate investors holding stakes in listed companies shall, inter
capital with the right to request the directors to alia: (i) make available to the market a commitment
supplement the agenda of an already-called meeting. In policy which describes how their investment intertwines
such case, the requesting shareholders shall provide the with their general investment strategy (e.g. investment
company with a report on the supplemented item, to be monitoring and engagement, risks, financial and non-
made public prior to the meeting. financial results, exercise of voting rights, social and
environmental impact, etc.), (ii) disclose, at least on a
yearly basis, their actual implementation of such
18. What rights do investors have to take
commitment policy and how their voting rights have
enforcement action against an entity
been exercised.
and/or the members of its board?
Specific rules tackle the issue of transparency of asset
In case the directors breach their duties, they shall be managers and institutional investors, as well as long-
liable towards the company (see point 11 above). term shareholder engagement.
Should the shareholders meeting not reach the required As a general rule, non-controlling investors cannot exert
majority, qualified minority shareholders (20% of the influence on a corporate entity’s management, as the
corporate capital or 5% in case the company is listed) latter is exclusively competent and responsible on
may file a derivative suit. Any recovered amount shall be
business matters. However, in engaging with the
paid to the company, net of the legal costs.
management, investors may express their views and
make suggestions and/or recommendations.
In case an investor suffers a direct damage following a
Nonetheless, they cannot deprive the directors of their
negligent or wilful misconduct of a director (i.e. not an
exclusive governing competence. The board is not
indirect damage, such as a reduction of the value or the
revenues of the company), said investor may claim required – from a strictly legal standpoint – to factor into
damages from the relevant director. its decisions investors’ interests, unless on a voluntary
basis.

19. Is shareholder activism common? If so,

20. Are shareholder meetings required to
what are the recent trends? How can
shareholders exert influence on a be held annually, or at any other specified
corporate entity’s management? time? What information needs to be
presented at a shareholder meeting?
Italian financial markets experienced a significant growth
in shareholder activism and engagement in the past Pursuant to Art. 2364, par. 2, ICC, the board of directors
years. shall call the shareholders meeting at least on a yearly
basis, no later than 120 days from the date of expiration
According to the latest publicly-available data (2019 of the financial year (usually set by the by-laws at 31
Report on corporate governance of Italian listed December) – or 180 days from such date if the company
companies, issued by the CONSOB): ‘In line with the is required to consolidate the accounts of other entities
previous year, the 2019 Annual General Meetings or such term extension is grounded on reasons relating
(AGMs) of the 100 most capitalized Italian listed to the corporate purpose or structure – for the purposes
companies record a large attendance by shareholders of resolving upon the financial statements, which shall
(on average 72% of the share capital), and in particular be made freely accessible to the shareholders (at the
by institutional investors (on average 21% of the share corporate seat) at least 15 days prior to the meeting.
capital). Participation by both Italian and foreign
institutional investors has remained stable over the last With sole reference to listed companies, Art. 125-ter CFA

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 Corporate Governance: Italy

sets forth that, together with the calling notice, the duties (see point 12 above), in case such breach is
shareholders shall be provided with written reports on detrimental to the creditors’ rights to effectively collect
each of the items on the agenda, prepared by the board their receivables, (c) pursuant to Art. 2418 ICC, the
of directors, as well as other transparency documents. noteholders’ representative shall have the right to
attend the shareholders meeting.
It is worth noting that, pursuant to Art. 2374 ICC,
shareholders holding at least 1/3 of the corporate capital
shall have the right to request a postponement of the 23. How are the interests of non-
meeting, should they assert not to have enough shareholder stakeholders factored into the
information on the item to be addressed. The new decisions of the governing body of a
meeting shall convene no later than 5 days from the corporate entity?
original date.
As mentioned, management matters are reserved to the
exclusive competence of the board of directors (see
21. Are there any organisations that
point 4 above).
provide voting recommendations, or
otherwise advise or influence investors on The board is not required – from a strictly legal
whether and how to vote (whether standpoint – to factor non-shareholder stakeholders’
generally in the market or with respect to interests into its decisions, unless on a voluntary basis
(see point 19 above).
a particular entity)?
As regard listed companies, the latest version of the CG
Proxy advisors often play a fundamental role in
Code strongly stresses the importance of considering
determining the voting outcome in listed companies’
them as well.
shareholders meetings, especially with reference to
compensation resolutions (so-called say-on-pay).
24. What consideration is typically given to
Art. 123-octies CFA (recently adopted as part of the SRD
ESG issues by corporate entities? What are
2 implementing measures) sets forth specific rules
applicable to proxy advisors. The latter shall disclose to
the key legal obligations with respect to
the market, inter alia: (i) the essential characteristics of ESG matters?
the methods and models applied, (ii) their main sources
of information, (iii) the extent and nature of their The mentioned issues are experiencing a significant
engagement with the listed companies object of their growth in awareness by companies and stakeholders.
research, (iv) the procedures implemented to guarantee
From a legal standpoint, general legal disclosure
the quality of their research, advice and voting
obligations are set forth under Directive 2014/95/EU as
recommendations, (v) the procedures implemented to
regards disclosure of non-financial and diversity
prevent and manage conflicts of interest.
information (which is currently under review by the
European Commission), as well as the relevant national
22. What role do other stakeholders, implementing laws and regulations. Also, the European
Commission issued a set of guidelines to help companies
including debt-holders, employees and
disclose environmental and social information and a
other workers, suppliers, customers, further set of guidelines on reporting climate-related
regulators, the government and information (which in practice supplement the
communities typically play in the corporate mentioned non-financial disclosure).
governance of a corporate entity?
More recently, Regulation (EU) 2019/2088, on
Unless so provided for on a voluntary basis, stakeholders sustainability‐related disclosures in the financial services
do not typically play a role in the company’s corporate sector, laid down harmonised rules for financial market
governance. participants and financial advisers on transparency with
regard to the integration of sustainability risks and the
It should be noted that, among others: (a) employees consideration of adverse sustainability impacts in their
may be granted with corporate rights by means of processes and the provision of sustainability‐related
granting them with financial instruments or stock information with respect to financial products. The latter
options, (b) pursuant to Art. 2394 ICC, creditors shall has been later amended by Regulation (EU) 2020/852,
have the right to sue the directors for breach of their on the establishment of a framework to facilitate

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 Corporate Governance: Italy

sustainable investment, establishing the criteria for As regard stewardship, no statutory rules are provided
determining whether an economic activity qualifies as for. It should be noted that Assogestioni (the Italian
environmentally sustainable for the purposes of Investment Management Association) issued the Italian
establishing the degree to which an investment is Stewardship Principles, which are best practice and non-
environmentally sustainable. mandatory principles, aimed at inter alia: (i) providing a
set of high-level best practices designed to promote
The remuneration policy under Art. 123-ter CFA (recently discussion and cooperation between investment
amended by the SRD 2 implementing measures) shall management companies and listed companies in which
serve the long-term interests and sustainability of the assets are invested, (ii) encouraging interaction between
company as a whole and shall be approved by the investment management companies and investee
shareholders meeting at least every 3 financial years. companies, in order to ensure that governance and
investment process are closely linked, (iii) improving the
As regard listed companies, the latest version of the CG quality of communication with investee companies, as
Code strongly stresses the importance of ESG issues. well as encouraging investment management companies
to create added value for their clients/investors by
As regard banks, governance principles on sustainable effectively addressing the issues related to corporate
finance and ESG are expected to the come into force in performance.
2021 (the Bank of Italy launched a consultation in late
December 2020).
26. What are the current perspectives in
this jurisdiction regarding short-term
25. What stewardship, disclosure and other investment objectives in contrast with the
responsibilities do investors have with promotion of sustainable longer-term value
regard to the corporate governance of an creation?
entity in which they are invested or their
level of investment or interest in the As mentioned, SRD 2 introduced a varied set of rules
aimed, among others, at: (a) encouraging long-term
entity?
shareholder engagement (e.g. institutional investors
With regard to listed companies: (a) pursuant to Art. 120 shall publicly disclose how the main elements of their
CFA, investors holding more than 3% of the corporate equity investment strategy are consistent with the
capital/voting rights of the company (5% if the company profile and duration of their liabilities, in particular long-
term liabilities, and how they contribute to the medium
is a SME under the CFA) shall notify such holding to the
to long-term performance of their assets), (b) enhancing
company, the CONSOB and the market, (b) pursuant to
transparency between companies and investors (e.g.
Art. 122 CFA, where investors holding more than the
asset managers shall disclose how their investment
mentioned thresholds enter into a shareholders
strategy contributes to the medium to long-term
agreement (patto parasociale), such investors shall
performance, reporting on the key material medium to
inform of the agreement the company, the CONSOB and
long-term risks associated with the investments), (c)
the market.
ensuring a more long-term approach by listed
companies, (d) enhancing long-term financial and non-
Also with regard to listed companies, any investor
financial performance of both the companies and the
triggering certain holding-thresholds (namely: 10%, 20%
investors, (e) incentivizing directors to contribute to the
and 25% of the corporate capital/voting rights of the
long-term success of the company (e.g. the
company) shall state the objectives it intends to pursue
remuneration policy shall contribute to the company’s
in the following six months, setting out inter alia: (a) the
business strategy and long-term interests and
means of financing used for acquiring the relevant
sustainability).
holding, (b) whether it acted alone or in concert with
other persons, (c) whether it intends to make further The relevant national implementing laws and regulations
stock purchases and/or acquire control over the provide further detail on such principles.
company and, in such case, the strategy it intends to
adopt, (d) its intentions as to any agreements and As regard listed companies, the latest version of the CG
shareholders’ agreements to which it is a party to, (e) Code strongly stresses the importance of long-term
whether it intends to appoint and/or remove directors or sustainable development. A similar principle is set forth
statutory auditors. under Circular no. 285/2013 issued by the Bank of Italy.

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