How to Avoid Unwanted Liability as a Director: New Italian Rules Provide Clearer Guidance

The Italian government introduced, effective on January 1, 2004, a new set of rules to modernize Italian corporate law. These new rules include several provisions which significantly and positively innovate in the area of Directors’ duties and liabilities.

The old corporate rules described the duties and liabilities of Directors in general terms (e.g., duty of loyalty, duty of care, duty of supervision). Pursuant to the courts’ interpretation of the duty of supervision, all Directors were practically always be held jointly and severally liable due to an alleged failure to "supervise." These applied also to non-executive Directors who found themselves most of the times in exactly the same position as executive Directors.