Recent case law has progressively expanded the scope of directors' liability, making the adequacy of organisational, administrative, and accounting structures under Article 2086 of the Italian Civil Code an increasingly critical issue.
The regulatory framework
The obligation to establish adequate organisational structures, introduced by the Italian Code of Business Crisis and Insolvency, has fundamentally changed the duty of care owed by directors. It is no longer sufficient to manage the business properly — directors must equip it with tools capable of detecting early warning signs of distress.
Practical implications
For directors of limited liability companies, this concretely means implementing systems to monitor the company's financial position, preparing updated cash flow plans, verifying the sustainability of debt, and ensuring adequate information flows to the supervisory bodies.
Adequacy as a continuous process
The adequacy of organisational structures is not a static achievement but a continuous process. Directors must periodically verify that the systems in place are genuinely capable of detecting signs of distress and, if not, must promptly update them.
Liability profiles
The courts have made clear that directors' liability may arise not only from flawed management decisions but also from the failure to adopt — or the inadequacy of — organisational structures. This widening of the liability perimeter makes a proactive approach to corporate governance essential.
Recommendations
We recommend that directors of limited liability companies carry out periodic reviews of the adequacy of their organisational structures, engaging specialist advisors where necessary, and properly document the reviews conducted and the decisions taken.
The information contained in this article is of a general nature and does not constitute professional advice.