Strong Blockholders and Corporate Governance Structures that Improve Minority Shareholders' Protection : The Case of Telecom Italia

This paper provides a case study which describes corporate governance structures and mechanisms at Telecom Italia S.p.A. Telecom Italia is one of the largest Italian companies. It is listed both on the Italian Stock Exchange, where it is a 'blue-chip' company, and on the New York Stock Exchange (NYSE), so that it is subject to US securities laws and, in particular, to the Sarbanes-Oxley Act. Since its privatisation in 1997, Telecom Italia has offered some examples of how minority shareholders may face difficulties to have their interest safeguarded. However the paper describes how Telecom Italia has tried to improve its corporate governance, which may currently be considered an Italian best practice, thanks to the company's efforts to strengthen minority shareholders' protection in order to be more competitive in capital markets