Company’s directors, professionals or part of a corporate body?

The management of a company, regardless of how it is structured – BoD, SD, joint or separate administration – is the centre of the entire corporate governance.

It is probably the importance of such role that has attracted the attention of the jurisprudence and doctrine that in recent years has been characterized by a huge debate on the legal qualification of the relationship that binds the director to the company.

Leaving aside some doctrinal opinions that are not mainstream or that date back in time (such as the one that assimilates the director to an agent or the even more isolated opinion that qualifies him as an employee), starting with the ruling n. 10680/94 of the plenary session of the Supreme Court, the other Courts, until then divided between the theory of the organic identification and the one of a contractual relationship, were oriented in favour of the latter, arguing, briefly, that the directors are subject to the orders of the shareholders (a reconstruction which, in truth, has never been accepted by the most keen doctrine).

The right qualification of the nature of the directors’ relationship with the company is far from being only theoretical. In fact, it is related to the identification of the Court that has the power to rule about any dispute that involves the director (labour judge, ordinary court and, today, the Companies Section), and also to the limit of the director’s compensation the can be pledged (therefore, the application or not of the limits set forth in art. 545, par. 4, of the Italian Code of Civil Procedure).

With the great Italian reform of company law which dates back in 2003, it was immediately clear that such an approach was no longer compatible with the powers, autonomy, rights and obligations that the new scenario was giving to directors. One of the most clear example of the new scenario is given by the impossibility of the shareholders to reserve to themselves management powers, since the statute can only provide for an authorization power of the shareholders, but the activity has to be carried out by the directors.

The interpretative uncertainty leads in 2015 the third section of the Supreme Court to ask a plenary session of the Supreme Court in order to resolve the interpretative doubt.

With the ruling n. 1545/2017, the plenary session of the Supreme Court has totally changed the former opinion of it, framing the relationship of the director with the company as “corporate relation” likewise the one referred to in art. 3, par. 2, lett. a), of Legislative Decree n. 168/2003 in order to define the competence of the Court sections specialized on company law (so sharing the arguments of the Court judgments of the past years 2014, 2015 and 2016).

Once the director is considered as the personification of a corporate body, he represents a vital part of the company receiving its powers directly from the law (similarly to what happens to the shareholders). The Supreme Court indeed stated that these powers are: “not revocable, available, or limitable by the shareholders’ meeting“.

The current jurisprudential scenario, in line with the legislative one, imposes, therefore, to refer to the Court sections specialized on company law with reference to any dispute which involves the directors whose remuneration, therefore, could be pledged without the limits provided for by Art. 545,par. 4 of the Italian Code of Civil Procedure (except for the part which could derive from an employment relationship which, as the Supreme Court teaches, is simultaneously compatible with the role of director).

The principle of the organic identification of the directors was recently also followed by the Milan Court section specialized on company law with the ruling n. 6628/2018. Such orders will surely play an important role for the further Italian judgments on the nature of the relationship that exist between the director and the company.