New rules for renewal of boards of listed companies and multiple-vote rights of unlisted companies

What are the changes?

• Bylaws of listed companies can provide that the resigning Board of Directors submits its own list of candidates for the renewal of the Board of Directors, provided that it contains a number of candidates equal to the number of members to be elected increased by one-third. A quorum of two-thirds of the members of the Board is required to decide on the submission of the list.
• Pursuant to the amended Article 2351 of the Italian Civil Code, bylaws of unlisted companies can assign up to ten votes for each multiple-vote share.
• Listed companies can provide in their bylaws that, in addition to the current existing premium of 2 votes per share, an additional 1 vote may be earned after a minimum of 2 years of uninterrupted ownership, and subsequently, 1 vote for each additional 12-month period, with an increase up to a maximum of 10 votes per share.
• Companies admitted to trading on alternative markets can provide in their bylaws that shareholders' meetings are held exclusively through a designated representative.

Next steps

The new bill also gives the government extensive power to put in place a deep reform of the Italian Financial Code Legislative Decree no. 58 of 24 February 1998 (TUF) within one year. This is very important, as it allows the government to update and improve other parts of the Italian law regarding listed companies and financial markets.

Authored by Pierluigi Feliciani.