A New Shareholder Association to Improve the Governance of Italian listed SMEs

Italian corporate law gives minority shareholders of public companies the right to appoint a member of the Board of Directors (‘BoD’) and the chairman of the Board of Statutory Auditors. In particular, minority shareholders, representing certain thresholds of share capital (determined annually by CONSOB for each issuer based on certain parameters and oscillating between 0.5% to 4.5%), may submit slates of candidates for the appointment of the members of those corporate bodies. Companies must ensure – when minority shareholders’ slates are submitted – that at least one member of the Board of Directors and the chairman of the Board of Statutory Auditors are elected from the slate that receives the second-highest number of votes and is not connected in any way, directly or indirectly, to the shareholders who submitted or voted for the highest voting slate.

Nevertheless, in 2015, less than 36% of SMEs listed on Italian regulated markets (Assonime data) had a representative of the minority list on the BoD, due to the absence of minority slates. The picture is similar for the Board of Statutory Auditors. The absence of representatives of minorities in corporate bodies can easily determine potentially abusive behaviour by controlling shareholders, and ultimately a decrease in the stock price.

In this context, a group of professionals, managers and entrepreneurs have founded AIEDA (Italian Association for the Exercise of Shareholders’ Rights), a non-profit association with the goals of promoting good corporate governance and facilitating dialogue between listed companies directors and minority shareholders as well as the exercise of their rights.

More specifically, AIEDA intends to promote and encourage shareholder stewardship in Italian listed SMEs by submitting of slates of candidates for the election of independent minority representatives in corporate boards. In particular, AIEDA intends to select independent candidates, submit slates and solicit proxies on-line to convey votes on its candidates. An AIEDA committee will select candidates based on criteria that ensure compliance with requirements of integrity, professionalism and independence more stringent than those imposed by the law or the Italian Corporate Governance Code.

In an environment of credit rationing due to the Italian banking sector’s well-known problems, improving corporate governance at SMEs is key to ease their access to external funding. It is hoped that AIEDA’s initiatives can be instrumental to that goal.

Francesco Dagnino is a partner at LEXIA Avvocati and co-founder of AIEDA.


With the support of