Contributed By CMS Adonnino Ascoli & Cavasola Scamoni
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.
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.
A very broad list of the duties of the directors specifically mentioned in the ICC would include compliance with: