ITALY Law and Practice Contributed by: Francesco Di Carlo and Filippo Raynaud, FIVERS Studio Legale e Tributario
cerning requests to supplement the agenda and sub - mit additional draft resolutions.
An external auditor or audit firm mandatorily conducts the statutory financial audit. In companies subject to a mandatory financial audit (eg, listed companies), the supervisory body – board of statutory auditors, supervisory board or internal audit committee, depending on the governance system – is also required to serve as audit committee pursuant to Legislative Decree 39/2010 (which implemented EC Directive 2006/43) and in that capacity monitor the financial reporting process and effectiveness of internal control, internal audit and risk management systems. Since most of the Italian SPAs have adopted the tra - ditional model, this analysis will be limited to the cor - porate governance rules applicable to the traditional model. See 4.1 Companies and Shareholders for a more detailed description of the structure of a board of directors in an SPA with the “traditional” governance model. A company (typically, a large-sized SPA and less frequently an SRL) may appoint a General Manager ( Direttore Generale ), a top manager with wide mana - gerial powers and responsibilities. The General Man - ager may be appointed in alternative or in addition to the CEO. SRL In an SRL, the by-laws contemplate a wide range of possible management structures: • sole director; • a board of directors; and • multiple directors, with joint or separate powers. An SRL is not required to appoint a supervisory body (ie, sole auditor or board of statutory auditors) or an external auditor, unless it exceeds certain dimensional thresholds set out in Article 2477 of the Civil Code, is required to prepare consolidated financial statements, controls a company subject to mandatory statutory audit, or it is required to by special laws (eg, due to its specific business activity).
2. Corporate Management 2.1 Principal Bodies or Functions SPA The corporate governance of an SPA may be based
upon three possible models. So-called traditional model
The “traditional model” is the most common and default governance model. It is comprised of a man - agement body (a sole director or a board of directors) and a control collective body (ie, the board of statutory auditors), both appointed by the shareholder meeting. Typically, the board of directors has a general man - agement and strategic role and delegates specific managerial powers to a chief executive officer and/or to one or more additional executive directors and/or an executive committee. The board of statutory audi - tors has a control function and is required to ensure that the company’s management is in compliance with the law, the by-laws and with the principles of proper management, and in particular with respect to the adequacy of the organisational, administrative and accounting structure of the company. Furthermore, the board of statutory auditors may be required to conduct the financial audit of the company, if the com - pany has not appointed an external auditor or audit firm (see 7.1 ESG Requirements ). The two-tier model The two-tier model is inspired by the German govern - ance system and contemplates a supervisory board appointed by the shareholders’ meeting and a man - agement board, appointed by the supervisory board. An external auditor or audit firm mandatorily conducts the statutory financial audit. A one-tier model The one-tier model contemplates a single manage - ment body appointed by the shareholder meeting, which includes in itself an internal audit committee comprised of independent directors.
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