[Last updated: 1 January 2024, unless otherwise noted]

Corporate governance regulation in Italy is contained in two sets of rules. There are certain compulsory corporate governance rules primarily set forth under the Consolidated Financial Act (Legislative Decree no. 58/1998, as amended and integrated from time to time). There are also certain voluntary rules set forth under a voluntary code (Corporate Governance Code), which are subject to the "comply or explain" principle.

The core of the Italian compulsory corporate governance rules are in line with EU standards and directives and incorporate certain corporate governance provisions, including information and transparency duties (such as the obligation to publish an annual corporate governance report and an annual directors' remuneration report), certain directors' duties (such as reporting conflicts of interest), the obligation to approve an internal regulation of the general shareholders meetings and of the board of directors, certain rules for calling shareholders meetings and for participating and voting in the meetings and regarding the exercise of shareholders rights (such as information rights prior to the general shareholders meeting or the recognition of the principle regarding equal treatment of shareholders).

The voluntary corporate governance rules under the Corporate Governance Code contain recommendations relating to a wide range of corporate-related matters, such as size and functional structure of the board of directors, disclosure of certain information regarding the directors, number of independent directors, proportion between directors appointed by the major shareholders and independent directors, information to be provided to directors and dedication of the same and approval and transparency of the directors' remuneration. Under the Corporate Governance Code, the companies required to issue an annual corporate governance report are also required to include in the report an explanation of the degree of compliance (or lack of compliance) with the recommendations of the Corporate Governance Code. Therefore, in certain cases, Italian rules leave it up to companies to decide whether or not to follow corporate governance recommendations but require them to give a reasoned explanation for any deviation, so that shareholders, investors and any other stakeholders may take an appropriate and informed decision.