ITALY Law and Practice Contributed by: Maurizio Marullo, Giorgio Vagnoni, Claudia Marongiu and Pasquale Ambrosio Cepparulo, LAWP Studio Legale e Tributario
included contractually. These are especially common in long-term, operational JVs where the preservation of the business relationship is important. In regulated sectors, specific administrative or regulatory concilia - tion procedures may apply before formal dispute reso - lution can be initiated. Italy is also a party to major international instruments governing dispute resolution, including: • the Washington Convention (ICSID), ratified by Law No 109/1970, which allows for the resolution of disputes between foreign investors and member states through international arbitration; • the New York Convention, ratified by Law No 62/1968, which obliges contracting states to recognise and enforce arbitral awards rendered in other signatory countries; and • the European Convention on International Com - mercial Arbitration, ratified by Law No 418/1870, which governs commercial arbitration between parties from different countries. The board of directors is typically appointed by the shareholders’ meeting through a majority resolution, except for the first directors, who are appointed in the deed of incorporation. The company’s bylaws can grant each co-venturer the right to appoint one or more directors and may also regulate the appointment of key roles such as the chairperson, vice-chairperson, or managing directors. The bylaws also establish the minimum and maximum number of directors and the duration of their office, which may not exceed three financial years for S.p.A.s. Directorships are typically held by individuals, but under Italian law, legal entities may also be appointed (though they must designate a permanent representa - tive). There are no nationality or residency restrictions for directors, so foreign individuals can be appointed without limitation, subject to any sector-specific rules and reciprocity criteria being met. 7. The JV Board 7.1 Board Structure
To ensure board control or deadlock resolution, it is common to: • allocate casting votes to one or more directors on specific matters; and/or • negotiate voting rights and quorum rules to reflect the JV parties’ commercial balance. Re-election is permitted unless expressly excluded by the bylaws. Directors may also be removed by share - holder resolution; however, removal without just cause entitles the director to compensation for damages. 7.2 Duties and Functions of JV Boards and Directors The primary duty of the board of directors and its members is to manage the company and to carry out any activities necessary to fulfil the corporate pur - pose. Specifically, the board of directors is respon - sible for providing the company with an adequate organisational and accounting structure (also aimed at promptly detecting any signs of insolvency), make strategic decisions, approve the business plan and budgets, and oversee their implementation. The board of directors may delegate its functions to executive directors or executive subcommittees, which will have the authority and responsibility to manage the company within the scope of the powers granted to them, and to ensure that the organisational, administrative, and accounting structures are appro - priate for the nature and size of the business. The following duties and powers cannot be delegated by the board: • issuance of convertible bonds and capital increas - es; • preparation of the draft annual financial state - ments; • actions to be taken in the event of losses eroding the share capital; and • preparation of merger and demerger plans. Directors are bound to execute their office in the com - pany’s best interest, and to safeguard the company’s assets. Therefore, in the case of a conflict of interest between the company’s interests and the interests of
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