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of its members, or to one or more of its members (managing directors), or both. The directors that are delegated so are held to a periodic and broad duty of information towards the board of directors and the board of statutory auditors, regarding the typical performance and prospects of the company, including the most relevant transactions entered on behalf of the company and of any subsidiary controlled by the latter. Finally, it should be specified that the delegation of powers to the managing director/s or to the executive committee does not imply that the board of directors renounces such delegated powers, but only that the principle of the collegial exercise of said powers is waived. Thus, the board of directors will always retain power in addition to those granted to the managing director/executive committee. Concerning the board of statutory auditors, it is composed of three or five statutory auditors, plus two alternate auditors. The statutory auditors are appointed by the shareholders’ meeting and remain in office for a term of three years. They cannot be revoked, except for just cause. The main duties of the statutory auditors consist in the control of the company’s activities and their compliance with the law and the by- laws, including the control that the company is properly managed, and that the organizational, administrative, and accounting system of the company is adequate to its actual needs. With this aim, the statutory auditors are entitled to proceed, also on an individual basis, with inspections and controls on the management of the company, and they
are also entitled to require information from the directors with respect to specific transactions or to the actual performance of the company. The statutory auditors are jointly liable with the directors for the facts or omissions conducted by directors, provided that the adverse effect or damage caused by such facts or omissions would have not occurred, had they supervised the directors’ activities in compliance with their duties. According to law, the control on the accounts and on the financial statements of the company, is performed by an external auditor (either a professional individual or a company), with the exception of those cases where a company is not obliged to consolidate its balance sheets. In such cases, in fact, the by-laws of the company may assign such duties to the board of statutory auditors. b.2) The Dualistic System In the dualistic system, a relevant part of the corporate governance passes from the shareholders to an independent professional body, namely the surveillance board. On the other hand, the management of the company is entrusted to an administrative board, which is made of at least two members, appointed by the surveillance board. The administrative board is the only body ultimately liable for pursuing the company’s purpose and, apart from only a few exceptions, it is governed by the same provisions set out for the board of directors in the traditional system. The surveillance board is made of at least three members (among which at least one effective and one substitute
ILN Corporate Group – Establishing a Business Entity Series
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