In the traditional system, the corporate governance of a Joint Stock Corporation (“JSC”) is structured with a management body, in the form of a Board of Directors (“BoD”) or of a Sole Director (“SD”), and a Board of Statutory Auditors (“BSA”). If allowed by the Articles of Association (“AoA”) or by the General Meeting (“GM”), the BoD may delegate some of its powers to one or more Managing Directors (“MD”).

Division of Duties: In the traditional system, the management body may be composed either of a Sole Director (“SD”) or of several directors, which constitute the Board of Directors (“BoD”). In general, the BoD/SD deals with all the administrative matters of the Company as it is entrusted with its management and business administration. [...] Actually, the decision-making structure is marked by a separation between ownership and control so that the Shareholders, virtually have no power to control either its day-to-day operation or its long term policies. The BoD/SD is responsible for these duties.Unless the management of the Company is carried out by a SD, the BoD members can resolve only within BoD Meetings and in no event, the BoD members can attend the BoD Meetings by proxy.

Composition: The composition of the BoD is set out by the Shareholders in the AoA or in a subsequent decision of the GM. The BoD appoints among its members a Chairman, if not already appointed by the GM.

Appointment/Dismissal Competence: The BoD members are appointed by the GM, with the exception of the first BoD members that are designated in the Memorandum of Association (“MoA”). The law and the AoA may also reserve, by way of exception, the appointment of certain BoD members to the holders of financial instruments issued by the Company or to the government or other public bodies, where they hold Shares (or a golden share) in the Company or where it is so required by law. The BoD members are appointed for a term not exceeding 3 years. Unless otherwise set forth in the AoA or in the resolution that appointed them, the BoD members cease to hold the office when the GM approves the financial statements of their last year of office. The BoD members may be revoked at any time by the GM, with the exception of the BoD members appointed by the government or other public bodies. If the revocation is made without just cause (i.e. a cause that would not allow to continue the relationship even for a provisional time), the revoked BoD member is entitled to a compensation for damages. A BoD member can resign at any time by giving written notice to the BoD and to the Chairman of the BSA. The resignation is immediately effective if the majority of the appointed BoD members is still in office at the time the BoD member’s resignation is presented. If it is not, the resignation becomes effective only upon the re-appointment of the majority of BoD members and their acceptance of the office. If the majority of the BoD members ceases to hold office, the remaining members have to convene a GM which appoints new BoD members in substitution of the ceased ones. The AoA may provide that if certain BoD members cease to hold office, all the entire BoD ceases; in this case the GM must be promptly convened for the appointment of the new BoD (this principle is named “simul stabunt simul cadent”).

Alternates: No alternates are allowed. Upon the cessation of one or more BoD members, the remaining members may, if they are still in office, appoint substitute members of the BoD by way of a resolution to be approved also by the BSA (in Italian: “cooptazione”). The BoD members so appointed remain in office until the first GM following their appointment, in where the Shareholders decide whether or not they are to remain in the office.

For a description of how to change the respective board members, please see the individual steps in the "Step-by-Step"-schedules below. As all information on how to change board members in Italy on the CBM Site by nature is generic (i.e. does not include specific requirements for listed companies, special requirements in statutory documents or as otherwise stipulated in any type of special law), we strongly recommend seeking legal advice with Nctm Studio Legale before actually changing any board members in Italy.