About Supporting the election of minority candidates to the board of Italian listed companies

Collaboration details

The “voto di lista” mechanism provides for the election of directors from slates submitted by shareholders.

While a certain percentage of directors are elected from a list of candidates submitted by the majority shareholder or board of directors, the remainder (at least one) are elected from so-called "minority lists", i.e. from candidates submitted by minority shareholders. Slates of candidates can be submitted by any shareholder holding a minimum number of shares as determined by the Italian Securities Market Authority (CONSOB). Minority shareholders are allowed to pool their shareholdings to reach the required threshold as, under Italian law, the submission of a minority slate of candidates can be done jointly, without being considered "acting in concert".

Candidates are selected by investors from longlists of profiles provided by an independent advisor. For each company, the advisor provides the Committee with a longlist of potential candidates, from which the Committee selects the profiles to be included in the shortlist to be submitted. Candidates must meet the requirements of professionalism, integrity, and independence set out in applicable regulations and company bylaws, as well as the Committee’s own Selection Principles. In particular, the Principles require enhanced independence requirements: candidates selected by the Committee are independent not only of the company in which they will serve, but also of the investors who submit their candidacies. The decisions of the members of the Committee regarding the composition and presentation of minority slates never affect the exercise of voting rights at the AGM.

Objectives

The aim of the collaboration is to gather and maximise the support of the international investors for the election of minority candidates to the boards of Italian listed companies, involving them from the selection process carried out by the Investment Managers’ Committee to the vote at the AGM.

The “Voto di lista” mechanism has proven to be one of the most effective tools to empower asset managers and institutional investors in the corporate governance of listed companies. Slate voting has enabled minority shareholders – coordinated by the Investment Managers’ Committee – to propose and elect minority candidates to the boards of the companies in which they invest, without having to oppose management or the controlling shareholder.

Slate voting allows asset managers and institutional investors to engage with the companies in which they invest on an ongoing and increasingly mature basis. In fact, independent directors appointed by minorities are often not only one of the most effective features of corporate governance systems, but also a tool for monitoring and engaging with the companies themselves.