ITALY Law and Practice Contributed by: Francesco Di Carlo and Flavio Acerbi, FIVERS Studio Legale e Tributario
on the governance system – is also required to serve as audit committee pursuant to Legislative Decree 39/2010 (which implemented EC Direc - tive 2006/43) and in that capacity monitor the financial reporting process and effectiveness of internal control, internal audit and risk manage - ment systems. Since most of the Italian SPAs have adopted the traditional model, the authors will limit their analysis to the corporate governance rules appli - cable to the traditional model. See 4.1 Board Structure for a more detailed description of the structure of a board of direc - tors 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 managerial powers and responsibili - ties. The general manager 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 pow - ers. An SRL is not required to appoint a supervisory body (ie, sole auditor or board of statutory audi- tors) 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 do so by special laws (eg, due to its specific business activity). In an SRL, corporate governance rules are more flexible and depend heavily on the by-laws. 3.2 Decisions Made by Particular Bodies Typically, the board of directors defines the over - all strategy (eg, the business plan) and organi - sational structure of the company. The board appoints the chairperson (if the chairperson is not appointed by the shareholders), the board committees, and defines the overall strategy and organisation of the company. The board may delegate managerial powers to a chief executive officer, one or more executive directors, or an executive committee, provided that under Italian law some matters may not be delegated by the board of directors, such as (Article 2381, paragraph 4, Civil Code): • issuance of convertible bonds; • approval of the draft annual financial state - ments; • approval of capital increases; • resolutions regarding capital losses; and • merger and demerger proposals. Board committees perform informative, propo - sitional and consultative functions vis-à-vis the board. 3.3 Decision-Making Processes SPA In an SPA with a board of directors, the decision- making process typically follows these steps: • the chairperson calls the board meeting pursuant to the by-laws. Generally, by-laws provide that a board meeting must be con -
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