Directors’ Duties in Italy

>> Board Requirements in Italy

Appointment of management board members

Under Italian law, the company may be managed either by a Sole Director or a Board of Directors (BoD) appointed by the Shareholders’ Meeting or by the Articles of Incorporation in case of their first appointment.

Board meetings and composition requirements

In the event that the company is managed by a BoD,  the business must be carried out jointly. The BoD is presided by a Chairman chosen by the BoD among its members, if he or she has not been appointed by the Shareholders’ Meeting.

In the interest of best practice, in terms of corporate governance, the Board of Directors shall pass at least one resolution per year for the approval of the draft financial statements and the calling of the Quotaholders’ meeting.

No general qualifications are required in order to be appointed a director, although there are certain causes of ineligibility. In particular, individuals who are incapable or have been interdicted, bankrupted, as well as persons who have been convicted of a criminal offence and, accordingly, are prevented from being appointed public officials cannot be appointed directors.

Additionally, the by-laws may condition the holding of office by directors to the possession  of specific integrity, experience and independence requirements.

Generally, voting rights are controlled by the Articles of Association, and can allow for decisions of the Board to be adopted by  written circulation.

Signatory rights/powers of directors

Directors are vested with (i) management,  (ii) executive and (iii) representative powers.

With respect of point (i), directors are entrusted with the general and exclusive duty to manage the company. Concerning point (ii), the directors have the power to execute and duly perform all shareholders’ resolutions (except where the directors are in conflict with the company’s interest with respect to specific resolutions). Finally, in relation to the last point (iii), the representation powers granted to the directors  by the by-laws or by a shareholders’ resolution are general in nature.

Furthermore, the BoD may grant any and all powers to manage the company to one or more Managing Director. In such event, the Managing Director/s shall be fully entitled and empowered to sign any and all documents, declarations, statements submitted on behalf of the company, limited to the powers granted thereto.

Conflicts

If a director has an interest in a certain matter to be resolved upon by the BoD, the director (i) must disclose the conflicts and interests that he or she may have in a given transaction and, (ii) the subject resolution must sufficiently illustrate the reasons for which it is desirable for the company to adopt such resolution. If the director carrying the aforesaid conflict of interest is the Managing Director, he or she must abstain from carrying out the transaction and must submit the relevant decision to the BoD.

The Company can ask a court to declare  invalid a contract entered into by a Director having the power to represent the Company where (i) the Director acted in his own interest or in the interest of a third party, and (ii) the third party was aware or should have been aware of such conflict of interest.


Latest version updated 4th April 2018

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