This Chapter provides an extensive analysis of the regulatory framework for shareholder voting and engagement in Italy. Despite high levels of ownership concentration of publicly listed companies, institutional investors have grown into prominent players on the Italian corporate governance scene. In particular, the Italian practice of shareholder engagement shows that say-on-pay, related party transaction oversight and slate voting for director elections are all useful for policing institutional investors’ active ownership, but they have to mutually combine in order to be effective. First, say-on-pay is a tool complimentary to minority representation on the board of directors to foster institutional investor stewardship. Second, minority board representation ensured by slate voting can improve self-dealing oversight since ex ante independent scrutiny of related-party transactions is required. Moreover, at Italian listed companies, the presence of minority-elected directors has actually had a positive impact on the adequacy of internal procedures for addressing related-party transactions.

Italy has a stewardship code, and institutional investors are on the rise, playing an increasingly active role in the governance of listed companies. Against this background, this chapter sheds fresh light on the distinctive features which make the Italian regulatory system unique in promoting active institutional ownership. A distinctive characteristic of the Italian corporate governance system is the so-called slate (or list) voting system, which enables minority shareholders to appoint at least one board member. Also, implementation of the Shareholders Rights Directive and, specifically, the record date system for participating in and voting at general meetings has contributed significantly in turning institutional investors into major players in the corporate governance arena. Moreover, the Investment Management Association, which represents most Italian and foreign asset managers operating in Italy (Assogestioni), plays a particularly effective role by publishing the Italian Stewardship Principles and promoting collective engagement initiatives aimed at facilitating the appointment of management and statutory auditor board members through the slate voting system.