Italy

Italy's economic institutions are undergoing a dramatic transformation. The more liberal climate, coupled with the spectacular, bullish trend of the Milan Stock Exchange in 1997 and the first 2 months of 1998, has brought to the forefront of public debate the issue of advancing sound corporate governance and minority shareholders' protection in listed companies. These issues were addressed and partially resolved in February 1998 when the Italian government approved a legislative decree on financial markets, which introduces several improvements in the Italian system of corporate governance. Unique to the Italian reforms is their focus on modifying the ownership structure of Italian companies listed on the Italian Stock Exchange and revitalizing of the market for corporate control. Also unique to the Italian corporate governance reforms is a decision to modify the role of the corporate bodies already contemplated by Italian corporate law rather than introducing new structural forms, such as board committees and independent or outside directors. The decree will officially come into force on July 1, 1998. However, the applicability of many of its provisions will depend on the adoption of implementing regulations.