The judgment (Cassazione civile sez. II, 03/08/2022, n. 24068) examines the issue of the permissible boundaries of directors of a joint stock company authorizing third parties outside the company's board of directors with powers of attorney. This is a common practice among corporations, and it is crucial to distinguish between specific mandates and powers of attorney and general powers of attorney. The former is widely accepted, whereas the latter is still under debate among experts and courts.
In this case, the court ruled that the delegation of powers was too extensive, resulting in the directors losing all their authority. As a result, the judges declared the power of attorney null and void due to its non-compliance with the law.
Specifically, the court found that a general power of attorney is inconsistent with article 2380-bis of the Italian Civil Code, which reserves the function of administration exclusively for the company's directors. Thus, shareholders' rights to appoint individuals to manage the company are nullified. Furthermore, article 2381 of the Italian Civil Code limits the delegation of authority to only the members of the board of directors, which logically extends to prohibiting the delegation of those functions to third parties as well.
Next steps
Although the courts have taken a clear stance, it is important to highlight that the latest regulations on business organization and professional requirements for directors require the need for specialized individuals to handle company affairs. As such expertise may not always be available internally, the use of a power of attorney, even if not restricted to specific matters, still holds significant importance.
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Authored by Pierluigi Feliciani and Federico Scio.
