The Relationship between Shareholders and Directors at the Stage of Access to a Company’s Insolvency Plan Procedure: A Comparative Perspective

The article explores the topic of corporate governance in the specific context of accessing an insolvency plan procedure, focusing on the balance of powers between shareholders and directors. It addresses whether shareholders should be informed of the firm’s financial distress (and, if so, when and how), whether they should be involved in the decision to enter a restructuring or liquidation procedure, and to what extent they may contribute to defining the content of the plan and how their participation should be structured. While the analysis is grounded in Italian law, the article seeks to propose an interpretative solution by examining the regulatory approaches adopted in other EU Member States and drawing on key insights from academic literature. In particular, the article tests the hypothesis that, in small and medium-sized enterprises undergoing restructuring procedures that may impact shareholders’ rights, shareholders should play an advisory role in the directors’ decision to initiate the process—provided they are not subsequently granted strong reaction powers. This approach appears to (i) reduce the risk of internal conflicts that might hinder the success of the restructuring; (ii) align with the preferable view that corporate distress does not eliminate shareholders’ interests in favour of creditors’, but rather leads to a coexistence of both interests; and (iii) be consistent with the framework set out by Directive (EU) 2019/1023.