ITALY Law and Practice Contributed by: Francesco Di Carlo and Filippo Raynaud, FIVERS Studio Legale e Tributario
SRL In an SRL, directors are appointed and may be removed through a vote of the quota-holders, unless the by-laws provide otherwise (Article 2475 of the Civil Code). SPA Directors are appointed by the ordinary shareholder meeting (Article 2383 of the Civil Code). The by-laws may entitle specific categories of shareholders and/ or holders of participation financial instruments with a right to appoint directors. Directors may be removed any time by the shareholder meeting, provided that in the event of a removal without cause the removed director is entitled to damages. In a listed SPA, the appointment of directors by the shareholder meeting is conducted through a slate- voting mechanism provided in the by-laws (see 1.3 Companies With Publicly Traded Shares ), designed to ensure representation of minority shareholders (Article 147-ter UFC). The composition of the board of directors must comply with specific gender diver - sity requirements. 3.5 Independence of Directors Italian corporate law does not require companies to appoint independent directors, except for listed com - panies and entities subject to sector laws (eg, banks, financial institutions), as indicated above ( 1.3 Com- panies With Publicly Traded Shares ). It bears high - lighting that an SPA is required to appoint a board of statutory auditors, which has a control function and whose members must be independent. There are rules and requirements under general Ital - ian corporate law designed to regulate situations of potential conflicts of interests, as indicated below. SPA Italian corporate law prohibits directors of an SPA from engaging in activities that compete with the com - pany. In particular, directors may not act as unlimited liability partners in competing firms, undertake com - peting activities on their own or on behalf of others, or serve as directors or general managers of compet - ing companies – unless expressly authorised by the shareholder meeting (Article 2390 of the Civil Code).
making process of the board and guarantee an effective monitoring of management; • a significant number of non-executive directors should be independent (in general, at least two independent directors; in larger companies with a concentrated ownership structure, at least one- third of the board; in other larger companies, at least half of the board); • the company should apply diversity criteria to the composition of the board of directors, ensuring the primary objective of adequate competence and professionalism of its members; and • each company should define the diversity criteria for the composition of the board of directors and the control body, and identify the most suitable tool for their implementation, considering its ownership structures. It bears noting that listed companies are required to include in their annual “report on corporate govern - ance and ownership structure” a description of the diversity policies applied in relation to the composi - tion of the administrative and control bodies or explain the reasons why it decided not to adopt any diversity policy (unless the information is referred to in the “sus - tainability report”, see 2.2 Types of Decisions ). Specific composition requirements are also mandated pursuant to specific sector laws (eg, banks and finan - cial institutions). 3.4 Appointment and Removal of Directors/ Officers In SPAs and SRLs a person that has been disqualified or declared bankrupt or sentenced to a penalty involv - ing a prohibition to hold public offices or managerial roles may not be appointed director (Article 2382 of the Civil Code). Additional requirements apply to listed SPAs (as set forth in Ministerial Decree 162/2000) as well as to companies subject to specific sector laws (eg, directors of banks are required to comply with so called “fit and proper” requirements). Under Italian law, the mechanisms for appointing and removing directors vary depending on the corporate form and whether a company is listed, as indicated below.
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