Related-party rules will change corporate Italy

Italy has taken a significant step towards a more transparent corporate governance regime with more efficient protection of minority shareholders. On March 12 2010, the Italian capital markets authority, the Commissione Nazionale per le Società e la Borsa (Consob) approved a regulation that introduces new rules for governing related-party transactions. The new regulation applies to Italian listed companies and companies with widely held shares ie, unlisted companies with more than 200 shareholders (not counting the controlling shareholders) that hold at least 5% of the share capital. It implements Article 2391-bis of the Italian Civil Code (which was enacted in 2004) empowering Consob to regulate related-party transactions.

The objective of the new regime is to ensure transparency as well as procedural and substantial fairness in related-party transactions. To comply with the new regulation, boards of directors will be required to adopt ad hoc procedures. Most Italian listed companies will have...