State-Appointed Directors, Related-Party Transactions and Corporate Opportunities in ‘Open’ State-Owned Companies

Abstract

State shareholding in Italy has features which are linked both to the quantitativesignificance of the phenomenon and to the fact that special powers of appointment and removal of directors and members of the board of statutory auditors may be entrusted to the state as well as other public entities, such as municipalities, by means of the articles of association. These special powers have no equal in other legal systems. Among these powers, the power of appointment of directors is the most significant because the particular relationship between the nominating public authority and the director appointed by it may result in a significant influence on the company’s interests. In ‘closed’ public limited companies special powers of direct appointment may be entrusted to the state-shareholder in a proportional manner to the size of its shareholding.