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Lesson 26 PUBLIC COMPANY: THE ADMINISTRATIVE BODY IN THE TRADITIONAL…

- - - - deeper
        As a result of the worldwide crisis in the financial markets, for which the lack of transparency and, in certain cases, the excessive quantification of the remuneration policy in large listed companies also took the limelight, Legislative Decree no. 259/2010 introduced a new article 123-ter (recently revised by Legislative Decree no. 49/2019) into the TUF, according to which the administrative body must prepare an annual report on the remuneration policy and the remunerations paid. It must be made publicly available (including at the registered office and on the Internet) at least 21 days before the Shareholders' Meeting and it is divided into two sections.
- - - - board quorums
        The constitutive quorum required by law for board resolutions is represented by the majority of directors in office; the deliberative quorum is otherwise represented by the absolute majority of directors present. Both quorum can be increased by the statute (Art. 2388, paragraphs 1 and 2).
      - the invalidity of board resolutions
        the resolutions taken not in accordance with the law or the statute can be appealed (art. 2388, paragraph 41:
        
        a) by the Board of Statutory Auditors and the absent or dissenting directors within 90 days of the date of the resolution; Procedurally, as compatible with the law, Article 2378 relating to the action for cancellation of resolutions passed by shareholders' meetings shall apply (see above, XXV.2.4.2);
        
        b) by the shareholders, but only if it is a matter of resolutions damaging to their rights; in this case, Articles 2377 and 2378, that is the entire discipline of the annulment of shareholders' meeting resolutions (see above, XXV.2.4.2.), are applied as compatible.
    - - the relationship between the board and the delegated bodies
        The delegated body does not have its own sphere of exclusive competence reserved to it by law and it is subject to the binding directives of the Board which, at any time, may also invoke an operation covered by the delegation, or even revoke it. The board has the residual power and duty to monitor the general management performance and to intervene if it becomes aware of facts prejudicial to the company.
      - executive and non-executive directors
        
        a) the delegated bodies must ensure that the organisational, administrative and accounting structure is appropriate to the nature and size of the company, and report to the Board of Directors and the Board of Statutory Auditors, at the intervals set out in the Statute and in any case at least every 6 months, on the general trend of the operations and its foreseeable evolution as well as on the most important operations
        - b) the Board, in its plenum,
        . 1) assesses the adequacy of the company's organisational, administrative and accounting structure on the basis of the information received;
        . 2) examines, when drawn up, the company's strategic, industrial and financial plans;
        . 3) assesses the general trend of the management on the basis of the report of the delegated bodies (art. 2381, paragraph 3);
        
        c) all directors are required to act in an informed manner and each one may ask the delegated bodies to provide information relating to the management of the company (Article 2381, paragraph 6);
        
        d) the chairman of the board of directors, who thus assumes a fundamental role of «hinge of guarantee» between executive and non-executive directors, shall ensure that all directors are provided with all the information on the items on the agenda of the board meetings.
        
        delegations and responsibilities
        case of delegations of powers, on the other hand, liability is diversified:
        
        a) for violations relating to the powers of the executive committee or functions specifically assigned to one or more directors, only those directors are liable (Art. 2392, paragraph 1);
        
        b) non-executive directors are jointly and severally liable with the executive directors if, being aware of prejudicial facts, they have not done all they could to prevent their fulfilment or to eliminate or mitigate the damaging consequences thereof (s. 2392, paragraph 2);
        
        c) they are also liable in the case of non-compliance with the duty to monitor and evaluate, on the basis of the report of the delegated bodies, the general performance of operations, to be judged taking into account their obligation to act in an informed manner and, consequently, to weigh the reliability of the information received and, if necessary, to request the executive directors to provide further information
- - - - procedural profiles
        According to the procedure, the liability action against the directors is promoted after a resolution of the ordinary shareholders’ meeting.
        Directors who are shareholders can’t vote on their liability.
        The resolution of the liability action implies the automatic revocation of the directors against whom it is directed, if it is taken with the favourable vote of at least 1/5 of the share capital
      - prescription, waiver, settlement
        The company may renounce the share and even settle it, provided that the renunciation and settlement are approved by express resolution of the shareholders' meeting and there is no vote against by a minority of shareholders representing at least one fifth of the share capital (a twentieth in the open corporation;
    - - with the reform for all companies, the possibility of exercising the company share by a qualified minority of the share capital. This is a particular form of procedural substitution through which one or more shareholders assert the right due to the company by requesting that the defendant directors be ordered to directly compensate the latter for the damage caused by their default.
        Operatively, art. 2393-bis provides that the corporate liability action may be exercised by shareholders representing
        
        a) in closed companies at least one fifth of the share capital (1/5) or the other measure provided for in the statute, in any case not exceeding one third;
        
        b) in open companies, at least one fortieth of the share capital (1/40) or the lower measure provided for in the statute.
    - - The law on the protection of savings (I. 262/2005) has provided that in all the corporation social actions may also be promoted following a resolution of the Board of Statutory Auditors with a two-thirds majority of its members (art. 2393, paragraph 3).