Company administrators are, by law and everywhere in the world, jointly and personally liable, with their own assets, for damages caused to third parties or to the company with regard to the decision-making activity carried out on behalf of the same.
The assets of the company (contrary to what happens in favour of clerical, executive and managerial staff who do not have special powers of attorney from the board of directors) are not put at the disposal of administrators if the same are recognised as liable for damages of a financial nature following omissions, errors or negligence.
Corporate law in force since 1st January 2004 and the development of corporate governance standards has burdened the role of company administrator and auditor with liability. This reform has established even more rigid duties and responsibilities for company managers, obligations of greater transparency and the publishing of corporate information and even stronger forms of protection of the interests and shareholders/minority shareholders and investors.
Administrators are explicitly bound to act in an informed manner; the diligence requested from administrators extends from the generic diligence of the agent or of the good father to the diligence required by the nature of the office and by their specific areas of responsibility.
In groups of companies, the administrators of the group leader who have acted in breach of the principles of correct corporate and entrepreneurial management are liable towards the shareholders and corporate creditors of the subsidiary companies for damages deriving from the damage caused to the right to profit, to valorisation of the company holding and the integrity of the corporate wealth.
In Bazzi & Partners we have negotiated Directors’ & Officers’ (D&O) policies with international Companies with dedicated wordings, addressed both to private companies and to companies listed on the stock exchange.