CORPORATE | The Italian Supreme Court on duty of non-executive to act in an informed manner

On 22 April 2024, the Italian Supreme Court issued order No. 10739 stating that the non-executive directors of a limited liability company (società a responsabilità limitata) who have not acted in an informed manner are jointly liable with the executive directors for any damage that the latter cause to the company.  Specifically, non-executive directors are not relieved of their responsibility if the information provided by executive directors is incomplete or absent. In fact, non-executive directors are required (a) to ask for information if the executive directors have not fulfilled their duty to inform the administrative body at least every 6 months in accordance with Article 2381, paragraph 5 of the Italian Civil Code; and (b) to prevent the executive directors from carrying out acts that are detrimental to the company and, if such acts have already been executed, to avoid or at least limit their negative impacts.

Newsletter n. 97 – June 2024