Experiments in Comparative Corporate Law: The Recent Italian Reform and the Dubious Virtues of a Market for Rules in the Absence of Effective Regulatory Competition

Abstract

The article addresses a sweeping Reform of corporate law which was enacted by the Italian government in 2003 and came into effect on January 1, 2004. The new statutory regulation significantly increases freedom of contract in corporate law, relying on the idea that the development of an efficient market for rules will allow the “natural selection” of the rules that better suit the need of the different stakeholders. Together – and to some extent to compensate for – this greater freedom of contract, new protections for minority shareholders have also been implemented. The reform also imports into the Italian legal system principles and rules originated or developed in other jurisdictions of both common and civil law. The article provides a critical overview of some of the major innovations, focusing on the ones concerning the financial structure of the corporation (new categories of shares, bonds, separate pools of assets, and the like); corporate governance and the protection of minorities. The reform is assessed in the current European regulatory competition scenario, in which the greater flexibility of Italian corporate law might play a significant role.