What sources of law do you navigate in order to address questions of director and officer liability, and what trends do you see among the regulatory agencies and courts that supervise these issues?
While addressing the questions raised on directors’ liability, Bacciardi and Partners navigates several sources of law. These also include Italian business criminal law (and case law too) which has broadened the concept of ‘duty of care’ with regard to directors and officers.
Directors are, in fact, too often held criminally liable for conducts that they either have specifically and negligently carried out, or that they have failed to carry out or diligently monitor.
It is therefore crucial for Bacciardi and Partners to maintain and further enhance knowledge on specific fields of law addressing the sources of directors’ liability such as company law, employment law, environment law and consumer law.
Directors are frequently found liable for submission of misleading financial statement or distribution of sham dividends. The main corporate offences in this field of legislation are set up within the relevant articles of Italian Civil Code and of Italian Criminal Code, as well as of the Legislative Decree n. 231/2001.
Directors are also bound to ensure full safety and hygiene on the premises of the company as well as on any production work-storage site used by the company, in compliance with Legislative Decree n. 81/2008. Within consumer law, directors may also be held liable should they be found in violation of the legal protection afforded to consumers, in compliance with the Italian Consumer Code provided for by Legislative Decree n. 206/2005.
Bankruptcy law is also important, since directors can be found liable in those cases where the company falls into pre-insolvency status followed by subsequent bankruptcy. The most recent reform on bankruptcy law aims at anticipating the occurrence of the corporate crisis by providing alert systems that can prevent corporate crisis from becoming irreversible as well as at giving space to the out-ofcourt settlement tools. The implementation of an efficient and timely assessment of the financial status of the company is an adequate tool and solution to ensure the directors may timely and preventively detect insolvency situations.
“Minimising Corporate Liability: Advice from Outside Counsel” is an IR Global report including contributions from 23 outside counsel across multiple jurisdictions. It touches on the key areas of director liability and governance mechanisms between board and c-suite executives; as well as current trends within regulatory agencies and courts of which in-house counsel should be aware. Download the full publication here.