Italy revises voting rules to protect minority investors
The Italian government is updating rules on enhanced voting rights to prevent major shareholders from forcing minority investors into delisting deals. The decree also lifts a long-standing ban on interlocking directorates for competing banks and insurance companies.
The government of Italy is preparing to revise regulations regarding enhanced voting rights for listed companies to prevent major shareholders from forcing the delisting of firms. This legislative shift aims to protect minority investors during takeover bids, addressing concerns that current rules are being misused to take companies private. In 2024, the administration of Prime Minister Giorgia Meloni strengthened voting power mechanisms to allow key investors up to ten-fold voting strength, intended to encourage listings in Milan while maintaining founder control. However, recent market activity has suggested these rules have been employed in ways that contradict the government's goal of expanding the public market.
The proposed draft decree specifies that enhanced voting rights will be frozen during shareholder meetings convened to vote on merger deals intended to delist a company. This freeze will also apply to plans aimed at relocating a company's registered office outside of the country. These measures come as asset managers and foreign funds have expressed frustration with the concentration of power, advocating instead for a "one share, one vote" standard. Activist investor Amber Capital has specifically cited the takeover of Antares Vision by the United States-based Crane NXT, Co. as an example of how these rules can negatively impact smaller shareholders.
Additionally, the decree lifts a long-standing ban on interlocking directorates within the financial sector. This rule, introduced in 2011 to ensure independence during the financial crisis, previously prevented board members from serving on the boards of competing banks or insurance companies. The government decided to repeal this ban following requests from the Italian banking lobby, ABI. Officials justified the move by stating that modern "fit and proper" assessments for managers—which include time commitment requirements and independence criteria—are sufficient to maintain board integrity. Despite these regulatory adjustments, the Italian market continues to be dominated by influential family and founding shareholders, with market capitalization at 48% of GDP in 2025.
