Institutional Investor Stewardship in Italian Corporate Governance

In spite of the highly concentrated ownership of listed companies, Italy is one of the countries in which institutional investors are on the rise and are playing an increasingly active role in the governance of their investee companies. Against this background, the goal of this paper is to provide a comprehensive analysis of institutional investors’ stewardship in Italy, by illustrating some distinctive features, which make the Italian regulatory system unique in promoting active institutional ownership. In particular, 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. In addition, the implementation of the Shareholder 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, this favorable regulatory context is coupled with the particularly effective role played by the Investment Management Association representing most Italian and foreign asset managers operating in Italy (Assogestioni) that publishes the Italian Stewardship Principles and promotes collective engagement initiatives aimed at facilitating the appointment of members of the management and the statutory auditors’ boards through the slate voting system.