giovanni strampelli - Academia.edu (original) (raw)
Papers by giovanni strampelli
Institutional ownership of listed companies has grown significantly, leading to an increase in ow... more Institutional ownership of listed companies has grown significantly, leading to an increase in ownership concentration in the European Union. Under the current context of re-concentrated ownership, institutional shareholders are expected, also in Europe, to play a more active role in corporate governance and to exert influence on the company’s strategies. Within such a corporate governance landscape institutional investor engagement is becoming a distinctive feature of corporate governance of European listed companies. In particular, board-shareholder dialogue is a key engagement tool and is essential in order to enable institutional investors to fulfil their stewardship functions. Board-shareholder dialogue is also core to listed companies’ communication strategies, since the growing demand for engagement by institutional investors has rendered traditional investor relations insufficient. Nevertheless, private meetings between directors and institutional investors raise concerns with respect to the financial markets law framework in the EU. In particular, the EU market abuse regime and the related principle of equal treatment for shareholders seem to hinder dialogue between directors and key shareholders. Against this background this Article shows that legal constraints deriving from EU financial markets law do not hamper institutional investor engagement. Furthermore, based on recommendations from corporate governance and stewardship codes as well as good practice standards drafted by corporate governance experts and institutions, it outlines an innovative practical framework that reduces the risk of violating disclosure rules and fosters board-shareholder engagement. In doing so, the Article provides theoretical and practical insights that can help to make institutional investor engagement more effective also in non-European countries.
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Within a context of increasing concentration of ownership, where the Big Three –BlackRock, State ... more Within a context of increasing concentration of ownership, where the Big Three –BlackRock, State Street and Vanguard– now hold over 20% of the shares in S&P500 companies, the spotlight now falls more than ever on institutional investors, which are being increasingly called upon to play a major role in favoring the shift towards stakeholder capitalism by pursuing environmental and societal objectives. These expectations are reinforced by leading institutional investors’ commitments –such as those included in Larry Fink’s last annual letter– to do well by doing good. In spite of this however, while the incorporation of ESG issues into investment policies is surely intended –perhaps above all– to attract an increasing share of clients that place central attention on those aspects, institutional investors’ commitment to pursue sustainability objectives face several limitations. First, promoting more virtuous conduct by investee companies entails significant costs, thereby impairing institutional investors’ returns. Secondly, even though portfolio value maximization objectives may, to some extent, favor the incorporation of ESG factors into investment and stewardship policies, the dissemination of passive funds (i.e. portfolios that track a particular benchmark equity index) is a factor that can impinge upon the effective capacity of institutional investors to encourage the adoption by investee companies of policies that pursue sustainability objectives. Against this backdrop, this article shows that it is illusory to assume that institutional investors can be charged with the task of pursuing objectives of general interest, such as fighting climate change (thus essentially acting in place of the state), where such a task is not aligned with their clients’ and their own interest in improving risk-adjusted returns.
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Global Shareholder Stewardship: Complexities, Challenges and Possibilities (Dionysia Katelouzou & Dan W. Puchniak eds, Cambridge University Press, Forthcoming, 2020
In spite of the highly concentrated ownership of listed companies, Italy is one of the countries ... more In spite of the highly concentrated ownership of listed companies, Italy is one of the countries in which institutional investors are on the rise and are playing an increasingly active role in the governance of their investee companies. Against this background, the goal of this paper is to provide a comprehensive analysis of institutional investors’ stewardship in Italy, by illustrating some distinctive features, which make the Italian regulatory system unique in promoting active institutional ownership. In particular, a distinctive characteristic of the Italian corporate governance system is the so-called slate (or list) voting system, which enables minority shareholders to appoint at least one board member. Moreover, this favorable regulatory context is coupled with the particularly effective role played by the Investment Management Association representing most Italian and foreign asset managers operating in Italy (Assogestioni) that publishes the Italian Stewardship Principles and promotes collective engagement initiatives aimed at facilitating the appointment of members of the management and the statutory auditors’ boards through the slate voting system.
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Rivista delle società , 2020
SOMMARIO: 1. Premessa.-2. La sospensione della regola ricapitalizza o liquida: ratio e finalità.-... more SOMMARIO: 1. Premessa.-2. La sospensione della regola ricapitalizza o liquida: ratio e finalità.-2.1. Segue: questioni interpretative ed applicative.-3. La presunzione di continuità aziendale ex articolo 7 del Decreto Liquidità: ratio e finalità.-3.1. Segue: la non applicabilità alle società che adottano i principi IAS/IFRS.-3.2. Segue: il problematico coordinamento con l'articolo 2086 c.c.-3.3. Segue: l'applicazione ai bilanci chiusi entro il 23 febbraio 2020 e non ancora approvati.-4. Conclusioni. 1. L'epocale crisi economica determinata dalla pandemia da Covid-19 ha imposto ai legislatori di tutti i principali Paesi l'adozione di misure emergenziali volte e contenere gli effetti della crisi sulle imprese e sul sistema economico più in generale. In Italia, così come nella maggior dei Paesi esteri, gli interventi legislativi nell'area del diritto societario e della crisi d'impresa sono riconducibili a tre direttrici principali: consentire l'adattamento della governance societaria alle eccezionali condizioni di emergenza sanitaria favorendo in particolare l'utilizzo di mezzi di comunicazione a distanza per il funzionamento degli organi sociali; prevenire, o quantomeno limitare, il rischio di acquisizioni ostili di società italiane considerate "strategiche" (in ragione del settore di appartenenza o altre caratteristiche) da parte di investitori esteri; la modifica della disciplina della crisi d'impresa al fine di evitare che il proliferare di fallimenti (destinati certamente a manifestarsi in gran numero in assenza di "contromisure" legislative) possa aggravare la congiuntura economica nonché a contenere il rischio che determinate previsioni, pensate per tempi "ordinari", possano ostacolare il salvataggio e il risanamento delle imprese a fronte di uno shock economico grave e generalizzato come quello attuale. Benché tutte le misure richiamate siano accomunate dall'origine emergenziale, che si riflette nella loro temporaneità, è da notare in via preliminare che gli interventi legislativi in materia di crisi di impresa presentano caratteristiche peculiari, le quali assumono rilievo ai fini dell'esame delle misure contenute nel d.l. 8 aprile 2020, n. 23 (c.d. Decreto Liquidità). In primo luogo, occorre prendere atto della circostanza che gli interventi legislativi sul diritto della crisi non sono autosufficienti come, ad esempio, quelli relativi al funzionamento dell'assemblea inclusi nell'articolo 106 del d.l. 17 marzo 2020, n. 18 (c.d. Decreto Cura Italia). Mentre quest'ultima previsione introduce un nuovo regime di svolgimento dell'assemblea dei soci "a distanza" risolvendo così, in modo esaustivo, i * Professore ordinario di diritto commerciale nell'Università Luigi Bocconi, Milano.
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14 Ohio St. Bus. L.J., Forthcoming
This Article sets out the first comprehensive analytical framework for non-activist shareholder c... more This Article sets out the first comprehensive analytical framework for non-activist shareholder cooperation, showing that coordinated engagement by non-activist institutions can be a promising lever by which to foster a more effective and viable corporate governance role for non-activist institutional investors and provide an alternative to activist-driven ownership involvement. After considering the diverging incentives structures of activist and non-activist investors and showing how they are reshaped in a context where investors collaborate in the engagement process, this Article shows how non-activist driven collective engagements are beneficial in several respects. Specifically, collective engagements favor the redistribution of engagement costs and, therefore, increase the net return earned by each institutional investor involved. In doing so, they also lower the free-rider problem, which generally affects institutional shareholders' behavior. Moreover, the presence of a third-party entity coordinating the engagement initiatives can work as an effective tool for reducing potential regulatory risks, mainly concerning 13D group disclosures and Regulation FD. Against this background, this Article concludes that, in order to promote non-activist collective engagement initiatives, there is the need for the SEC to provide greater clarity concerning the circumstances under which engaging collectively through an enabling organization will not, as a rule, be regarded as control-seeking or acting in concert, and will not trigger group filing obligations under Section 13 of the Securities and Exchange Act. In addition, the SEC should explicitly recognize the role of such coordinating entities¾that adopt predefined frameworks governing the process of engagement and establish rules of conduct for participating investors¾in promoting collective engagement initiatives in line with the applicable regulatory framework.
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Scritti in ricordo di Michele Sandulli, 2019
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![Research paper thumbnail of Commento all’art. 154-ter t.u.f. (Relazioni finanziarie) [Financial reports. Commentary on Article 154-ter t.u.f.]](https://attachments.academia-assets.com/58310931/thumbnails/1.jpg)
](Le società per azioni, Codice civile e norme complementari, directed by P. Abbadessa - G. B. Portale, Giuffrè, 2016
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![Research paper thumbnail of Commento all’art. 2423-bis (Principi di redazione del bilancio) [General financial reporting principles. Commentary on Article 2423-bis of the Italian Civil Code]](https://attachments.academia-assets.com/58310905/thumbnails/1.jpg)
](Le società per azioni, Codice civile e norme complementari, directed by P. Abbadessa - G. B. Portale, Giuffrè, Milano, 2016, 2016
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Rivista di diritto privato, 2017
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Rivista delle società, 2015
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Rivista delle società, 2014
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Rivista delle società, 2010
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Banca Borsa Titoli di Credito, 2018
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European Company and Financial Law Review, 2012
Directive 2006/68/EC eliminated the ban on financial assistance imposed by Article 23 of Directiv... more Directive 2006/68/EC eliminated the ban on financial assistance imposed by Article 23 of Directive 77/91/EEC. The new formulation of article 23 allows Member States the possibility of authorising public limited liability companies to undertake financial assistance transactions provided they give adequate safeguards to the (minority) shareholders and to third parties. Various Member States have not exercised this possibility and prevalent doctrine has given a negative evaluation of the text of article 23 of the second Directive. The conditions set forth in article 23 aimed at protecting minority rights and rights of creditors have been considered to be excessively rigid and constituting an obstacle to the effective simplification of the regulations governing financial assistance. This article suggests possible modifications to article 23 of the second Directive which could render financial assistance regime more flexible without prejudicing the interests of shareholders and creditors. This compromise solution ensures an adequate balance between flexibility and certainty and appears preferable to the proposed elimination of financial assistance regulation.
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European Company and Financial Law Review, 2011
The recent financial crisis has demonstrated that fair value accounting can affect not only the i... more The recent financial crisis has demonstrated that fair value accounting can affect not only the informational importance of annual accounts but also a company’s financial integrity. In legislations where standards of company law prompt companies to maintain minimum amounts of capital (or an equilibrium between assets and liabilities) the recording of unrealised losses may reduce a company’s share capital to a level below minimum thresholds. If fair value losses are transitory and do not reflect an actual lowering of a company’s assets’ value, fair value accounting may still prompt shareholders to consider an unnecessary recapitalisation or the “premature” dissolution of a firm. The negative consequences arising from interaction between fair value accounting and the legal capital rules can be prevented by neutralising (through appropriate rectifications of accounting numbers) fair value profits and losses for the sole purpose of respecting the provisions for share capital maintenance. This solution would make it possible to limit the impact of accounting rules on companies’ capital without prejudicing the informational importance of annual accounts.
Bookmarks Related papers MentionsView impact
European Business Organization Law Review, 2018
Within the EU investor protection framework, issuers are required to provide different investor g... more Within the EU investor protection framework, issuers are required to provide different investor groups with relevant information. Nevertheless, the issuers’ accounting regime seems to be inconsistent with this regulatory approach. Due to their ever increasing complexity, IAS/IFRS are not suitable to meet investors’ needs and can lead to an information overload, to which also sophisticated institutional investors are exposed. The article looks at the UK “strategic report” model and argues that the narrative component of financial reports can play a key role in rendering financial reports more informative and more suited to meeting information needs of different groups of users by diversifying information directed at sophisticated and unsophisticated investors. The article outlines the framework of a possible EU (more) harmonized framework in the area of narrative reporting, arguing that the ESMA can foster harmonization by providing guidelines on the enforcement of narrative reporting and (following the example of the Financial Reporting Council) promoting proactive activities aimed at developing guidance and recommendations on the contents and format of narrative reporting.
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University of Illinois Journal of Law, Technology & Policy, 2018
Although HFT has become a main feature of financial markets internationally, its impact on equity... more Although HFT has become a main feature of financial markets internationally, its impact on equity markets’ functioning is still under discussion, since HFT can negatively affect market quality and stability. Regulatory measures recently adopted on both sides of the Atlantic to better control HFT-related risks chiefly focus on markets’ stability, orderly functioning, and integrity, but poorly consider how HFT interacts with the allocative function of price discovery. In order to fill this gap, this article focuses on how HFT-related informational inequalities among investors threaten equity markets’ (long-term) efficiency. Subscription to news wires and market data-feeds, along with co-location, grant HFTs early access to market-moving information that allows for latency arbitrage and trading ahead of other investors, which can discourage informed (slower) traders from undertaking costly fundamental analysis. Therefore, HFT challenges the theoretical framework underlying the Efficient Capital Markets Hypothesis, and can negatively affect price accuracy, real resource allocation and equity markets’ allocative efficiency. Against this backdrop, this article develops a conceptual framework for possible regulatory strategies aimed at limiting the negative effects of HFT on allocative market efficiency by reducing HFTs’ speed advantage or incentivizing fundamental informed traders to enter markets where they face costly pressures to compete with HFTs. Restricting the sale of trade data feeds or mandating speed bumps may discourage HFT and weaken its positive effects in terms of increased liquidity and better short-term price discovery, without definitely curbing HFT-related risks concerning price long-term accuracy, while replacing the current continuous trading regime with a batched auctions-based regime would ask for major regulatory changes. Introducing an EU-like continuous, event-driven, and timelier, disclosure regime could limit these possible drawbacks by providing informed traders with more frequent and cheaper access to relevant information.
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Virginia Law & Business Review, 2018
Under the current context of (re)concentrated ownership, institutional shareholders are expected ... more Under the current context of (re)concentrated ownership, institutional shareholders are expected to play a more active role in corporate settings in making managers more accountable and urging them to favour a long-term view. Calls from institutional investors for engagement with the board have grown and private dialogue with directors is now an important instrument of institutional investor activism. In spite of this favourable trend, director-shareholder dialogue is still problematic. Public disclosure and insider trading rules set legal constraints on board-shareholder engagement. However, the reach of these constraints should not be overstated, as they do not appear to ban outright all private dialogue between directors and shareholders. In this regard, recommendations within corporate governance and stewardship codes, and from practitioners, have played a major role in developing a practical framework for director-shareholder dialogue that seeks to prevent the violation of insider trading and public disclosure rules, and to make dialogue more effective. Against this backdrop, this article will provide a comparative transatlantic overview of recent developments in the area of director-institutional shareholder dialogue in the US and in Europe with the aim of assessing the effective reach of legal constraints on board-shareholder dialogue under current legislation, and considering some practical solutions offered by corporate governance and stewardship codes that could facilitate board-shareholder engagement and enhance its effectiveness.
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Journal of Corporation Law, 2018
Directors' independence at controlled companies is an intriguing corporate governance conundrum. ... more Directors' independence at controlled companies is an intriguing corporate
governance conundrum. Recently, Bebchuk and Hamdani have shed new light on it by
providing an analyticalframework that seeks to make independent directors more effective
in performing their oversight role. They convincingly argue that some independent
directors should be accountable to public investors who, in order to achieve this aim,
should have the power to influence the election or retention of several "enhancedindependence"
directors. Starting from this persuasive outcome, and adopting a
comparative and functional analysis, this Article will extend the Bebchuk and Hamdani
framework in several directions, with the aim of rendering it more effective and adaptable
to different jurisdictions around the world. First, reliance only on the initiative of activist
hedge funds might raise some concerns with regard to the effectiveness of enhancedindependence
directors as monitors as well as to the cohesiveness of the board. This Article
will therefore argue that the involvement of non-activist institutional investors in the
selection and election of enhanced-independence directors should be enhanced. It will
further argue that the refinement of the election and retention process for independent
directors might not be enough in order to tangibly enhance their independence, as the
"human nature" of corporate boards must be taken into consideration as well. Pursuing
this line of thought, it will develop an in-depth analysis of strategies available in order to
limit the distorting effects of the board's relational dimension and to induce enhancedindependence
directors to perform their oversight role in a truly independent way.
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Institutional ownership of listed companies has grown significantly, leading to an increase in ow... more Institutional ownership of listed companies has grown significantly, leading to an increase in ownership concentration in the European Union. Under the current context of re-concentrated ownership, institutional shareholders are expected, also in Europe, to play a more active role in corporate governance and to exert influence on the company’s strategies. Within such a corporate governance landscape institutional investor engagement is becoming a distinctive feature of corporate governance of European listed companies. In particular, board-shareholder dialogue is a key engagement tool and is essential in order to enable institutional investors to fulfil their stewardship functions. Board-shareholder dialogue is also core to listed companies’ communication strategies, since the growing demand for engagement by institutional investors has rendered traditional investor relations insufficient. Nevertheless, private meetings between directors and institutional investors raise concerns with respect to the financial markets law framework in the EU. In particular, the EU market abuse regime and the related principle of equal treatment for shareholders seem to hinder dialogue between directors and key shareholders. Against this background this Article shows that legal constraints deriving from EU financial markets law do not hamper institutional investor engagement. Furthermore, based on recommendations from corporate governance and stewardship codes as well as good practice standards drafted by corporate governance experts and institutions, it outlines an innovative practical framework that reduces the risk of violating disclosure rules and fosters board-shareholder engagement. In doing so, the Article provides theoretical and practical insights that can help to make institutional investor engagement more effective also in non-European countries.
Bookmarks Related papers MentionsView impact
Within a context of increasing concentration of ownership, where the Big Three –BlackRock, State ... more Within a context of increasing concentration of ownership, where the Big Three –BlackRock, State Street and Vanguard– now hold over 20% of the shares in S&P500 companies, the spotlight now falls more than ever on institutional investors, which are being increasingly called upon to play a major role in favoring the shift towards stakeholder capitalism by pursuing environmental and societal objectives. These expectations are reinforced by leading institutional investors’ commitments –such as those included in Larry Fink’s last annual letter– to do well by doing good. In spite of this however, while the incorporation of ESG issues into investment policies is surely intended –perhaps above all– to attract an increasing share of clients that place central attention on those aspects, institutional investors’ commitment to pursue sustainability objectives face several limitations. First, promoting more virtuous conduct by investee companies entails significant costs, thereby impairing institutional investors’ returns. Secondly, even though portfolio value maximization objectives may, to some extent, favor the incorporation of ESG factors into investment and stewardship policies, the dissemination of passive funds (i.e. portfolios that track a particular benchmark equity index) is a factor that can impinge upon the effective capacity of institutional investors to encourage the adoption by investee companies of policies that pursue sustainability objectives. Against this backdrop, this article shows that it is illusory to assume that institutional investors can be charged with the task of pursuing objectives of general interest, such as fighting climate change (thus essentially acting in place of the state), where such a task is not aligned with their clients’ and their own interest in improving risk-adjusted returns.
Bookmarks Related papers MentionsView impact
Global Shareholder Stewardship: Complexities, Challenges and Possibilities (Dionysia Katelouzou & Dan W. Puchniak eds, Cambridge University Press, Forthcoming, 2020
In spite of the highly concentrated ownership of listed companies, Italy is one of the countries ... more In spite of the highly concentrated ownership of listed companies, Italy is one of the countries in which institutional investors are on the rise and are playing an increasingly active role in the governance of their investee companies. Against this background, the goal of this paper is to provide a comprehensive analysis of institutional investors’ stewardship in Italy, by illustrating some distinctive features, which make the Italian regulatory system unique in promoting active institutional ownership. In particular, a distinctive characteristic of the Italian corporate governance system is the so-called slate (or list) voting system, which enables minority shareholders to appoint at least one board member. Moreover, this favorable regulatory context is coupled with the particularly effective role played by the Investment Management Association representing most Italian and foreign asset managers operating in Italy (Assogestioni) that publishes the Italian Stewardship Principles and promotes collective engagement initiatives aimed at facilitating the appointment of members of the management and the statutory auditors’ boards through the slate voting system.
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Rivista delle società , 2020
SOMMARIO: 1. Premessa.-2. La sospensione della regola ricapitalizza o liquida: ratio e finalità.-... more SOMMARIO: 1. Premessa.-2. La sospensione della regola ricapitalizza o liquida: ratio e finalità.-2.1. Segue: questioni interpretative ed applicative.-3. La presunzione di continuità aziendale ex articolo 7 del Decreto Liquidità: ratio e finalità.-3.1. Segue: la non applicabilità alle società che adottano i principi IAS/IFRS.-3.2. Segue: il problematico coordinamento con l'articolo 2086 c.c.-3.3. Segue: l'applicazione ai bilanci chiusi entro il 23 febbraio 2020 e non ancora approvati.-4. Conclusioni. 1. L'epocale crisi economica determinata dalla pandemia da Covid-19 ha imposto ai legislatori di tutti i principali Paesi l'adozione di misure emergenziali volte e contenere gli effetti della crisi sulle imprese e sul sistema economico più in generale. In Italia, così come nella maggior dei Paesi esteri, gli interventi legislativi nell'area del diritto societario e della crisi d'impresa sono riconducibili a tre direttrici principali: consentire l'adattamento della governance societaria alle eccezionali condizioni di emergenza sanitaria favorendo in particolare l'utilizzo di mezzi di comunicazione a distanza per il funzionamento degli organi sociali; prevenire, o quantomeno limitare, il rischio di acquisizioni ostili di società italiane considerate "strategiche" (in ragione del settore di appartenenza o altre caratteristiche) da parte di investitori esteri; la modifica della disciplina della crisi d'impresa al fine di evitare che il proliferare di fallimenti (destinati certamente a manifestarsi in gran numero in assenza di "contromisure" legislative) possa aggravare la congiuntura economica nonché a contenere il rischio che determinate previsioni, pensate per tempi "ordinari", possano ostacolare il salvataggio e il risanamento delle imprese a fronte di uno shock economico grave e generalizzato come quello attuale. Benché tutte le misure richiamate siano accomunate dall'origine emergenziale, che si riflette nella loro temporaneità, è da notare in via preliminare che gli interventi legislativi in materia di crisi di impresa presentano caratteristiche peculiari, le quali assumono rilievo ai fini dell'esame delle misure contenute nel d.l. 8 aprile 2020, n. 23 (c.d. Decreto Liquidità). In primo luogo, occorre prendere atto della circostanza che gli interventi legislativi sul diritto della crisi non sono autosufficienti come, ad esempio, quelli relativi al funzionamento dell'assemblea inclusi nell'articolo 106 del d.l. 17 marzo 2020, n. 18 (c.d. Decreto Cura Italia). Mentre quest'ultima previsione introduce un nuovo regime di svolgimento dell'assemblea dei soci "a distanza" risolvendo così, in modo esaustivo, i * Professore ordinario di diritto commerciale nell'Università Luigi Bocconi, Milano.
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14 Ohio St. Bus. L.J., Forthcoming
This Article sets out the first comprehensive analytical framework for non-activist shareholder c... more This Article sets out the first comprehensive analytical framework for non-activist shareholder cooperation, showing that coordinated engagement by non-activist institutions can be a promising lever by which to foster a more effective and viable corporate governance role for non-activist institutional investors and provide an alternative to activist-driven ownership involvement. After considering the diverging incentives structures of activist and non-activist investors and showing how they are reshaped in a context where investors collaborate in the engagement process, this Article shows how non-activist driven collective engagements are beneficial in several respects. Specifically, collective engagements favor the redistribution of engagement costs and, therefore, increase the net return earned by each institutional investor involved. In doing so, they also lower the free-rider problem, which generally affects institutional shareholders' behavior. Moreover, the presence of a third-party entity coordinating the engagement initiatives can work as an effective tool for reducing potential regulatory risks, mainly concerning 13D group disclosures and Regulation FD. Against this background, this Article concludes that, in order to promote non-activist collective engagement initiatives, there is the need for the SEC to provide greater clarity concerning the circumstances under which engaging collectively through an enabling organization will not, as a rule, be regarded as control-seeking or acting in concert, and will not trigger group filing obligations under Section 13 of the Securities and Exchange Act. In addition, the SEC should explicitly recognize the role of such coordinating entities¾that adopt predefined frameworks governing the process of engagement and establish rules of conduct for participating investors¾in promoting collective engagement initiatives in line with the applicable regulatory framework.
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Scritti in ricordo di Michele Sandulli, 2019
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Le società per azioni, Codice civile e norme complementari, directed by P. Abbadessa - G. B. Portale, Giuffrè, 2016
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Le società per azioni, Codice civile e norme complementari, directed by P. Abbadessa - G. B. Portale, Giuffrè, Milano, 2016, 2016
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Rivista di diritto privato, 2017
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Rivista delle società, 2015
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Rivista delle società, 2014
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Rivista delle società, 2010
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Banca Borsa Titoli di Credito, 2018
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European Company and Financial Law Review, 2012
Directive 2006/68/EC eliminated the ban on financial assistance imposed by Article 23 of Directiv... more Directive 2006/68/EC eliminated the ban on financial assistance imposed by Article 23 of Directive 77/91/EEC. The new formulation of article 23 allows Member States the possibility of authorising public limited liability companies to undertake financial assistance transactions provided they give adequate safeguards to the (minority) shareholders and to third parties. Various Member States have not exercised this possibility and prevalent doctrine has given a negative evaluation of the text of article 23 of the second Directive. The conditions set forth in article 23 aimed at protecting minority rights and rights of creditors have been considered to be excessively rigid and constituting an obstacle to the effective simplification of the regulations governing financial assistance. This article suggests possible modifications to article 23 of the second Directive which could render financial assistance regime more flexible without prejudicing the interests of shareholders and creditors. This compromise solution ensures an adequate balance between flexibility and certainty and appears preferable to the proposed elimination of financial assistance regulation.
Bookmarks Related papers MentionsView impact
European Company and Financial Law Review, 2011
The recent financial crisis has demonstrated that fair value accounting can affect not only the i... more The recent financial crisis has demonstrated that fair value accounting can affect not only the informational importance of annual accounts but also a company’s financial integrity. In legislations where standards of company law prompt companies to maintain minimum amounts of capital (or an equilibrium between assets and liabilities) the recording of unrealised losses may reduce a company’s share capital to a level below minimum thresholds. If fair value losses are transitory and do not reflect an actual lowering of a company’s assets’ value, fair value accounting may still prompt shareholders to consider an unnecessary recapitalisation or the “premature” dissolution of a firm. The negative consequences arising from interaction between fair value accounting and the legal capital rules can be prevented by neutralising (through appropriate rectifications of accounting numbers) fair value profits and losses for the sole purpose of respecting the provisions for share capital maintenance. This solution would make it possible to limit the impact of accounting rules on companies’ capital without prejudicing the informational importance of annual accounts.
Bookmarks Related papers MentionsView impact
European Business Organization Law Review, 2018
Within the EU investor protection framework, issuers are required to provide different investor g... more Within the EU investor protection framework, issuers are required to provide different investor groups with relevant information. Nevertheless, the issuers’ accounting regime seems to be inconsistent with this regulatory approach. Due to their ever increasing complexity, IAS/IFRS are not suitable to meet investors’ needs and can lead to an information overload, to which also sophisticated institutional investors are exposed. The article looks at the UK “strategic report” model and argues that the narrative component of financial reports can play a key role in rendering financial reports more informative and more suited to meeting information needs of different groups of users by diversifying information directed at sophisticated and unsophisticated investors. The article outlines the framework of a possible EU (more) harmonized framework in the area of narrative reporting, arguing that the ESMA can foster harmonization by providing guidelines on the enforcement of narrative reporting and (following the example of the Financial Reporting Council) promoting proactive activities aimed at developing guidance and recommendations on the contents and format of narrative reporting.
Bookmarks Related papers MentionsView impact
University of Illinois Journal of Law, Technology & Policy, 2018
Although HFT has become a main feature of financial markets internationally, its impact on equity... more Although HFT has become a main feature of financial markets internationally, its impact on equity markets’ functioning is still under discussion, since HFT can negatively affect market quality and stability. Regulatory measures recently adopted on both sides of the Atlantic to better control HFT-related risks chiefly focus on markets’ stability, orderly functioning, and integrity, but poorly consider how HFT interacts with the allocative function of price discovery. In order to fill this gap, this article focuses on how HFT-related informational inequalities among investors threaten equity markets’ (long-term) efficiency. Subscription to news wires and market data-feeds, along with co-location, grant HFTs early access to market-moving information that allows for latency arbitrage and trading ahead of other investors, which can discourage informed (slower) traders from undertaking costly fundamental analysis. Therefore, HFT challenges the theoretical framework underlying the Efficient Capital Markets Hypothesis, and can negatively affect price accuracy, real resource allocation and equity markets’ allocative efficiency. Against this backdrop, this article develops a conceptual framework for possible regulatory strategies aimed at limiting the negative effects of HFT on allocative market efficiency by reducing HFTs’ speed advantage or incentivizing fundamental informed traders to enter markets where they face costly pressures to compete with HFTs. Restricting the sale of trade data feeds or mandating speed bumps may discourage HFT and weaken its positive effects in terms of increased liquidity and better short-term price discovery, without definitely curbing HFT-related risks concerning price long-term accuracy, while replacing the current continuous trading regime with a batched auctions-based regime would ask for major regulatory changes. Introducing an EU-like continuous, event-driven, and timelier, disclosure regime could limit these possible drawbacks by providing informed traders with more frequent and cheaper access to relevant information.
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Virginia Law & Business Review, 2018
Under the current context of (re)concentrated ownership, institutional shareholders are expected ... more Under the current context of (re)concentrated ownership, institutional shareholders are expected to play a more active role in corporate settings in making managers more accountable and urging them to favour a long-term view. Calls from institutional investors for engagement with the board have grown and private dialogue with directors is now an important instrument of institutional investor activism. In spite of this favourable trend, director-shareholder dialogue is still problematic. Public disclosure and insider trading rules set legal constraints on board-shareholder engagement. However, the reach of these constraints should not be overstated, as they do not appear to ban outright all private dialogue between directors and shareholders. In this regard, recommendations within corporate governance and stewardship codes, and from practitioners, have played a major role in developing a practical framework for director-shareholder dialogue that seeks to prevent the violation of insider trading and public disclosure rules, and to make dialogue more effective. Against this backdrop, this article will provide a comparative transatlantic overview of recent developments in the area of director-institutional shareholder dialogue in the US and in Europe with the aim of assessing the effective reach of legal constraints on board-shareholder dialogue under current legislation, and considering some practical solutions offered by corporate governance and stewardship codes that could facilitate board-shareholder engagement and enhance its effectiveness.
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Journal of Corporation Law, 2018
Directors' independence at controlled companies is an intriguing corporate governance conundrum. ... more Directors' independence at controlled companies is an intriguing corporate
governance conundrum. Recently, Bebchuk and Hamdani have shed new light on it by
providing an analyticalframework that seeks to make independent directors more effective
in performing their oversight role. They convincingly argue that some independent
directors should be accountable to public investors who, in order to achieve this aim,
should have the power to influence the election or retention of several "enhancedindependence"
directors. Starting from this persuasive outcome, and adopting a
comparative and functional analysis, this Article will extend the Bebchuk and Hamdani
framework in several directions, with the aim of rendering it more effective and adaptable
to different jurisdictions around the world. First, reliance only on the initiative of activist
hedge funds might raise some concerns with regard to the effectiveness of enhancedindependence
directors as monitors as well as to the cohesiveness of the board. This Article
will therefore argue that the involvement of non-activist institutional investors in the
selection and election of enhanced-independence directors should be enhanced. It will
further argue that the refinement of the election and retention process for independent
directors might not be enough in order to tangibly enhance their independence, as the
"human nature" of corporate boards must be taken into consideration as well. Pursuing
this line of thought, it will develop an in-depth analysis of strategies available in order to
limit the distorting effects of the board's relational dimension and to induce enhancedindependence
directors to perform their oversight role in a truly independent way.
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