ITALY Law and Practice Contributed by: Francesco Di Carlo and Filippo Raynaud, FIVERS Studio Legale e Tributario
SRL The rules under Italian corporate law on conflict of interests of directors in an SRL are less strict than those applicable in an SPA (Article 2475-ter Civil Code). In particular, in the event a director has a personal interest in conflict with the company a resolution of the board of directors may be challenged by the other directors and auditor(s) if: • the vote of the relevant director in conflict was decisive for the quorum; and • the resolution causes financial damage to the company. Moreover, any contracts executed on behalf of the company by a director with an interest in conflict with the company (whether it is a personal interest or an interest on behalf of another third party) may be annulled at the request of the company if the conflict was known or recognisable by the counterparty. 3.6 Legal Duties of Directors/Officers The main legal duties of directors of an SPA pursu - ant to the Italian Civil Code may be summarised as follows. • Duty of care – directors must fulfil their duties pursuant to applicable laws and by-laws with care, consistently with the nature of their office and their individual skills (Article 2392, paragraph 1, of the Civil Code). • Duty to act in an informed manner – directors must base their decisions on adequate information and request that any necessary information be provided to the board of directors (Article 2381, paragraph 6, of the Civil Code). • Duty to intervene – directors who become aware of potentially prejudicial facts must act to prevent or mitigate damages (Article 2392, paragraph 2, of the Civil Code). • Duty of loyalty – directors must perform their duties with independence of judgement, directing their action to the pursuit of the company purpose. • Duty of proper management – directors must ensure adherence to general business rationality and contribute to the implementation of an ade -
This authorisation may be general, prior, or implicit in the appointment resolution. A breach of this prohibi - tion exposes a director to dismissal and liability for damages. Directors and members of supervisory boards of com - panies operating in the credit, financial and insurance sectors are also subject to an “interlocking ban” (Arti - cle 36 of Law Decree 201/2011), that limits their right to hold management, supervisory or top executive roles in competing firms. Italian corporate law also requires directors to disclose any personal interest, whether direct or on behalf of third parties, in transactions undertaken by the com - pany to the other directors and statutory auditors (Arti - cle 2391 of the Civil Code). This obligation applies even if the relevant interest is not in conflict with the company (eg, if the company and the director have a concurring interest in a transaction) An “interested” director must disclosure the nature, terms, origin and extent of the interest. Once a per - sonal interest is disclosed, the relevant director is not required to abstain from voting on the matter. Instead, the board is required to justify the transaction thor - oughly, explaining its benefits. A duty to abstain exists for directors of an SPA operating in specific sectors (eg, banks and financial institutions), if they hold an interest that conflicts with the interest of the company. If the CEO holds a personal interest, they must abstain from executing the transaction. If the company is managed by a sole director, they must disclose its interest to the shareholder meeting. The board is collectively liable if a resolution lacks proper reasoning or fails to consider potential con - sequences and the “interested” director may be indi - vidually liable for any damage resulting from failure to disclose its interest. Directors may also be liable if they misappropriate corporate opportunities or confidential information learned through their role (Article 2391, paragraph 5, Civil Code).
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