Corporate Governance In Italy


Corporate governance can be defined as the system by which companies are directed and controlled. Its objective is often stated as being the enhancement of corporate profit and shareholder gain while having regard to the impact that this may have on other stakeholders of the company.


  • Listed companies are governed by a board of directors that meets at regular intervals and that adopts an organisation and a modus operandi enabling it to guarantee effective and efficient performance of its functions.
  • Directors shall act and decide autonomously, having full knowledge of the facts, and pursue the objective of creating value for the shareholders.
  • Directors shall accept their appointment to the board when they deem they can devote the necessary time to the diligent performance of their duties, taking account, among other things, of the number of positions they hold on the boards of directors or auditors of other companies listed on regulated markets, including foreign markets, financial companies, banks, insurance companies and large companies.
  • Directors shall provide information in the Corporate Governance Report on (1) its composition, indicating for each member the qualification (executive, nonexecutive, Independent), the relevant role held within the Board of Directors, the main professional characteristics as well as the duration of his/her office since the first appointment; (2) on the number and average duration of meetings of the Board and of the executive committee, if any, held during the fiscal year, as well as the related percentage of attendance of each director; (3) how the self-assessment procedure as at previous item has developed.


  • The Board of Directors shall be made up of executive and non-executive directors, who should be adequately competent and professional.
  • Non-executive directors shall bring their specific expertise to Board discussions and contribute to the adoption of fully informed decisions paying particular care to the areas where conflicts of interest may exist.
  • The number, competence, authority and time availability of nonexecutive directors shall be such as to ensure that their judgment may have a significant impact on the taking of Board’s decisions.
  • It is appropriate to avoid the concentration of corporate offices in one single individual.
  • Where the Board of Directors has delegated management powers to the chairman, it shall disclose adequate information in the Corporate Governance Report on the reasons for such organisational choice.
  • The Board shall designate an independent director as lead independent director, in the following circumstances: (i) in the event that the chairman of the Board of Directors is the chief executive officer of the company; (ii) in the event that the office of chairman is held by the person controlling the issuer.


  • The executive committee – in the person of its chairman – and the managing directors shall periodically report to the board of directors on the activities performed in the exercise of their delegated powers.
  • The bodies with delegated powers shall also provide adequate information on transactions that are atypical, unusual or with related parties whose examination and approval are not reserved to the board of directors.
  • They shall provide the board of directors and the board of auditors with the same information.


  • The board of directors shall form a committee on remuneration and stock option or equity based remuneration plans.
  • The committee, the majority of whose members shall be non-executive directors, shall submit proposals to the board, in the absence of the persons directly concerned, for the remuneration of the managing directors and of those directors who are appointed to particular positions and, acting on a proposal from the managing directors, for the criteria to be used in determining the remuneration of the company’s top management. To this end the committee may employ external consultants at the company’s expense.
  • As a general rule, in determining the total remuneration payable to the managing directors, the board of directors shall provide for a part to be linked to the company’s profitability and, possibly, to the achievement of specific objectives laid down in advance by the board of directors itself.


  • The internal control system is the set of processes serving to monitor the efficiency of the company’s operations, the reliability of financial information, compliance with laws and regulations, and the safeguarding of the company’s assets.
  • The board of directors is responsible for the internal control system. It shall lay down the guidelines for the system, periodically check that it is adequate and working properly, and verify that the main risks facing the company are identified and managed appropriately.
  • The managing directors shall identify the main risks the company is exposed to and submit them to the board of directors for its examination; they shall implement the guidelines laid down by the board of directors for the planning, operation and monitoring of the internal control system and shall appoint one or more persons to run it and provide them with appropriate resources.
  • The persons appointed to run the internal control system shall not be placed hierarchically under a person responsible for operations and shall report on their activity to the managing directors and to the internal control committee and the members of the board of auditors.


  • Each company shall adopt an internal control and risk management system consisting of policies, procedures and organizational structures aimed at identifying, measuring, managing and monitoring the main risks. Such a system shall be integral to the organizational and corporate governance frame work adopted by the issuer and shall take into consideration the reference model and the best practices that are applied both at national and international level.
  • An effective internal control and risk management system contributes to the management of the company in a manner consistent with the objectives defined by the Board of Directors, promoting an informed decision-making process. It contributes to ensuring the safeguarding of corporate assets, the efficiency and effectiveness of management procedures, the reliability of financial information and the compliance with laws and regulations, including the by-laws and internal procedures.


  • Proposals to be submitted to the shareholders’ meeting for appointments to the position of auditor, accompanied by detailed information on the personal traits and professional qualifications of the candidates, shall be deposited at the company’s registered office at least 10 days before the date fixed for the shareholders’ meeting or at the time the related lists are deposited.
  • The members of the board of auditors shall act autonomously with respect to shareholders, including those that elected them.
  • The members of the board of auditors are required to treat the documents and information they acquire in the performance of their duties as confidential and to comply with the procedure for the disclosure to third parties of such documents and information.


Italian Corporate Governance has evolved radically in the last decades thanks to both the evolution of the Corporate law, the adoption of the European Directives and the introduction and revision of the code of good governance. Today Corporate Governance of the listed Companies is characterized by a relative high protection of the shareholders’ rights, and board of Directors characteristics are at least formally, very similar to the best practices at international level.

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