Last Updated June 21, 2019

Law and Practice

Authors



CMS Adonnino Ascoli & Cavasola Scamoni is unique in its composition, which combines extensive local and international expertise in order to assist clients with all types of cross-border issues. The Italian corporate team (with offices in Milan and Rome) comprises over 30 professionals and is best known for its knowledge leadership, especially in the energy, life sciences, automotive and media sectors. It has strength in mid-market deals, with a number of long-term clients in this area. Recent highlight deals include international transactions concerning Total, including assisting Total Marketing Services SA and ERG Spa with the sale of TotalERG Spa to API Spa (Anonima Petroli Italiana S.p.A) and providing assistance to Moneygram with respect to restructuring after Brexit. The firm also concluded several high-value deals in 2018, with clients including NMS Group, Telit, and Cuki. It covers all corporate-related practice areas.

In order to ensure that directors undertake their role appropriately, there are a number of duties that they must comply with. A failure to comply with these duties could demonstrate a breach of their responsibility for the management of the company.

General Duties

Duty of care

Directors must perform their activities with a high standard of care and diligence, which depends on the nature of the office, their competence and the unique circumstances of each case, such as the kind of company, its size, the field of activity, the importance and conditions of the discussed operation and the timeframe available to make a decision.

Duty to pursue the company’s purpose

Directors must act in a way which they think is most likely to pursue the company’s purpose and promote the success of the company. This aim is deemed as pursued once the company has accomplished the corporate purpose as laid down in the bylaws.

Duty to inform and be informed

All directors are required to be informed about the day-to-day activities of the company and each director has the duty and the power to receive all relevant information of the company.

If appointed, managing directors must periodically inform the other directors and statutory auditors of the general development of the management, of its foreseeable evolution and of the most relevant operations (in terms of value or quality) including the company subsidiaries.

Duty to monitor

Even when some of these duties have been delegated to individual directors (or to an executive committee or to third parties), directors are jointly liable if they fail to supervise the general conduct of company affairs provided that, being aware of acts which could prejudice the company, they did not do what they could have to prevent their performance or to prevent or mitigate their harmful consequences.

Duty of confidentiality

Directors may be held responsible to the shareholders/quotaholders for damages arising from using and/or sharing business information learned during their time in office.

Specific Duties

A very broad list of the duties of the directors specifically mentioned in the ICC would include compliance with:

  • rules concerning the preservation of the equity and assets of the company (eg, prohibition of distributing fictitious dividends or dividends not resulting from duly approved financials);
  • calling of shareholders’/quotaholders' meetings when required by the law or the bylaws;
  • consenting to the inspections of the statutory auditors, if appointed, and giving them true and complete information;
  • maintaining true and complete accounting books and records;
  • payment of taxes, social security contributions, tax withholdings from employees’ salaries;
  • drafting of true and complete yearly accounts;
  • disclosing to the Chambers of Commerce details of parent companies or ultimate controlling shareholders, both resident and non-resident, which carry out direction and co-ordination activity concerning the Italian entities.
CMS Adonnino Ascoli & Cavasola Scamoni

Galleria Passarella 1
20122 Milan
Italy

+39 02 89 28 38 00

+39 02 48 01 29 14

daniela.murer@cms-aacs.com www.cms.law
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Authors



CMS Adonnino Ascoli & Cavasola Scamoni is unique in its composition, which combines extensive local and international expertise in order to assist clients with all types of cross-border issues. The Italian corporate team (with offices in Milan and Rome) comprises over 30 professionals and is best known for its knowledge leadership, especially in the energy, life sciences, automotive and media sectors. It has strength in mid-market deals, with a number of long-term clients in this area. Recent highlight deals include international transactions concerning Total, including assisting Total Marketing Services SA and ERG Spa with the sale of TotalERG Spa to API Spa (Anonima Petroli Italiana S.p.A) and providing assistance to Moneygram with respect to restructuring after Brexit. The firm also concluded several high-value deals in 2018, with clients including NMS Group, Telit, and Cuki. It covers all corporate-related practice areas.

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