Shareholders Right Directive II : The Italian Implementation

The revision of the Shareholders Rights Directive (“SRDII”) entered into force in 2017. The SRDII represents the landing point of a long process started in 2012 with the “Action Plan: European company law and corporate governance” drafted by the EU Commission. Already in the Action plan, the two key objectives pursued by the European Legislator were clearly displayed: enhancing companies’ transparency and enhancing shareholders’ engagement. These objectives are, in turn, instrumental in attracting stock market funding, alleviating the dependence of European companies on bank funding. This article discusses the implementation of the SRDII into the Italian legal system. The analysis discusses the main choices of the Italian legislation in implementing the SRDII rules and the coordination between these new rules and the Italian legal system, with specific reference to the general corporate law and the existing provisions on listed companies. We analyse four main features of the SRDII1) Rules on shareholder identification. These may create more problems than they solve. In particular, these rules may slightly curb the incentives of activists to engage target companies, fearing the free-ride of other investors. The coordination with the existing Italian law may worsen the situation.2) Rules on shareholder engagement. The Italian legislator provides Consob with interesting enforcement powers, close to a duty to demonstrate engagement. The Italian approach to the supervision of proxy advisors is also interesting, but likely ineffective because of the limited extraterritorial effect of the provisions.3) Say-on-pay legislation. The biggest novelty is the binding vote on the Remuneration Policy. Moreover, the coordination may prove problematic between the implementation of SRD II and the existing Italian law on variable remuneration awarded through financial instruments.4) Related-Party Transaction. The Italian legal system was ahead of its time in this regard. This can be explained by the peculiarities of Italian capitalism. The SRD II brought very few amendments to the existing regime. Notably, the definition of Related-Party has been widened and now directly refers to the international accounting principles (IAS 24)