Shareholders' Meeting
The shareholders' meeting is the decision-making body of a corporation. The shareholder’s meeting has very important duties such as approving the financial statements or electing the board of directors. Substantially, the shareholders’ meeting represents the requests of the owner, in other words, of the shareholders of the company.
There different types of meetings
There are three types of shareholders' meetings: an ordinary meeting, an extraordinary meeting and a special meeting. The distinction is not based on the different composition of the meeting (which is always formed by the shareholders of the company or their representatives), but by the matters the shareholders are required to discuss and decide.
- The ordinary shareholders' meeting approves the financial statements and appoints directors, statutory auditors and the chairman of the board of statutory auditors. The ordinary shareholders' meeting also decides the fees paid to persons who cover these positions (unless these are established by the articles of association) and examines other topics for which it is responsible pursuant to the articles of association or submitted to the meeting by the directors. An ordinary meeting should be called at least once a year, within 4 months from the end of the financial year.
- The extraordinary shareholders' meeting decides on amendments to the articles of association, the issue of bonds and the appointment and powers of liquidators.
- The special meeting is called to discuss and decide matters where the decisions of the shareholders' meeting concern categories of shares with voting restrictions (such as savings shares).
Calling meetings and quorum
The directors call the meeting with call notice listing the items on the agenda and indicating the time, date and place of the meeting. The call notice is published in the Italian Official Journal of the Republic at least 15 days before the meeting. Listed companies also publish the press release on their websites.
An ordinary meeting is quorate when shareholders or proxy holders representing at least half of the share capital (restricted voting shares are not counted) are present. The resolutions of an ordinary or extraordinary meeting are taken by absolute majority.
If capital share (quorum) is not reached, the shareholders' decisions are not valid and a second or third call of the meeting is made.
The second call of the ordinary shareholders' meeting discusses and decides items that should have been dealt with in the first call of the meeting, regardless of the share capital represented by the shareholders present. For the quorum of the second call of the extraordinary meeting, the vote of more than one third of the share capital is required.
In the third call of the meeting, the vote of shareholders representing more than one fifth of the share capital is sufficient. For some resolutions (change of corporate purpose, transformation of the company, early termination, transfer of the registered office abroad or issue of preference shares) a voting system with higher majorities is provided.
The shareholders' meeting is above all subject to the provisions of sections 2363 et sequitur of the Italian Civil Code. The articles of association of each company may have rules that are stricter or more specific than those laid down provided by the code.
For example, in the Hera shareholders’ meeting a particular role is entrusted to the public partners of the group. The articles association of the group provides that at least 51% of the capital should be controlled by Municipalities, Provinces or Consortia or by consortia or joint stock companies the majority of whose capital these control. Moreover, according to the Articles of Association, a group of ten public bodies holding at least 35% of the capital of Hera has the right to veto resolutions that involve the termination, demerger and merger of the company, the transfer of the company, or that modify the statutory rules on the quorum of shareholders’ meetings and the rights of veto.
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