ITALY Law and Practice Contributed by: Paolo Balboni, Luca Bolognini, Giulio Monga and Carmine Antonio Perri, ICT Legal Consulting
• notified to Consob; • published in extract form, either in a national news- paper or, more commonly, via the issuer’s website or authorised storage mechanism; • filed for registration with the Companies’ Register of the company’s registered office; and • disclosed to listed companies. Practical indications on such disclosure activities are established by Consob Regulation No 11971/1999. Under Italian law, directors owe their duties primarily to the company as a legal entity, and not directly to shareholders or other stakeholders. The core duties are set out in Articles 2391–2395 of the Italian Civil Code, further complemented by TUF and the general rule of the Civil Code on civil obliga- tions. The main provision on directors’ liability towards the company is Article 2392 Civil Code. According to that rule, in particular, directors must perform their duties with the diligence required by the nature of their office and their specific expertise. They are jointly and sev- erally liable towards the company for any loss result- ing from breach of their statutory or fiduciary duties, unless the matter falls within the delegated powers or specific functions assigned to other directors. Direc- tors are also liable if, being aware of prejudicial acts, they fail to take appropriate measures to prevent or mitigate harm. A director may be exonerated from liability only if, being free from fault, they promptly record their dissent in the board minutes and notify the chair of the board of statutory auditors ( collegio sindacale ) in writing. Under Article 2391 Civil Code, directors must act with loyalty and good faith, avoiding conflicts between personal and corporate interests. Any conflict must be disclosed and managed transparently, including abstention from voting where appropriate. For relat- ed-party transactions, Article 2391-bis Civil Code and Consob Regulation No 17221/2010 (with regard 11. Duties of Directors 11.1 Principal Directors’ Duties
to listed companies) establish additional procedural safeguards. In addition, under Article 94 TUF, the issuer and the persons responsible for the prospectus are liable for any false or misleading statements or material omissions contained in public offering documents. Although this provision primarily concerns the issuer, it reinforces the directors’ duty of diligence and accu- racy in market disclosure. 11.2 Special or Ad Hoc Committees Italian law does not explicitly require the establish- ment of special board committees for M&A transac- tions, but such committees are widely used in practice and strongly encouraged by corporate governance best practices. Under Article 2381 Civil Code, boards of directors may delegate powers to executive committees composed of some of their members, or to one or more individual directors, in order to ensure adequate oversight and information flow. For listed companies, the Corporate Governance Code – a voluntary code of conduct issued by Borsa Italiana in 2020 – recommends the creation of per- manent board committees (audit, remuneration, and nomination/sustainability), composed mainly of inde- pendent directors. In addition, ad hoc committees may be established to assess extraordinary transac- tions, such as mergers or acquisitions, particularly where conflicts of interest or related-party elements are involved. Under Consob Regulation No 17221/2010 on relat- ed-party transactions, independent directors’ com- mittees play a central role in ensuring that material related-party transactions are carried out on fair and reasonable terms, and in preventing and managing potential conflicts of interest. 11.3 Board’s Role In general, the board of directors is the primary body responsible for assessing, approving and supervis- ing extraordinary transactions, including mergers and acquisitions.
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