Business judgement rule: how does it work in Italy?

1 Febbraio 2017
The Italian Supreme Court, by means of decision no. 17761/2016, confirmed that a director of a company cannot be considered liable towards the company for having made business choices that, under an economical perspective, have not been deemed appropriate, since such evaluation is related to the entrepreneurial discretion. Therefore, such specific choice cannot lead to a revocation for cause of such director and the same choice cannot trigger the directors’ liability vis-à-vis the company.

The judgement over the degree of diligence used by the director in the accomplishment of his/her mandate, may not concern management choices, methods and circumstances, even if such choices may expose the company to significant risks.

Indeed, the judgement may only concern the diligence and care used by the director in analyzing – ex-ante – the risks related to the business transaction to be carried out in the name and on behalf of the company. Therefore, exclusively the lack of the required accuracy, evaluations and information that are normally required for similar choices made in the same circumstances and in the same manner may lead to the directors’ liability.

For more information on such decision, please refer to the following link.

Seguici su