What will remain of provisions and practice arisen within the company law during the emergency period?
Prepared by Andrea Lensi Orlandi, Flavia Caltagirone, Marco Maggiulli and Claudia Pagliari
The recommendation no. 187 issued by the Milan Notarial Council on March 11, 2020 and Section 106 of Law Decree no. 18/2020 (“Decreto Cura Italia”) brought corporate law into line with the “law of the Coronavirus emergency”. In fact, in order to also implement in this field measures of social distancing, it is currently possible – among others – that a Shareholders’ meeting may be held fully by telecommunication means, being “dematerialized” and “delocalized”.
By this and regardless of any provisions within the by-laws, corporate meetings may be validly held remotely by telecommunication means with the participation of all attendees, including the Chairman and the Secretary (or the Notary Public), who may now be physically located in different places (so-called “delocalized” meetings).
Being measures above adopted as a result of an extraordinary situation, there is the question of what will happen after July 31, 2020 – date set for the expiry of the special measures introduced by Decreto Cura Italia – or in any case once the COVID-19 outbreak will definitively be over.
In other words, it shall be wondered whether the entry into force of these rules could represent an opportunity to bring out in corporate law the transformed operating and working environment, in light of the latest technological innovations. This would be a radical change for companies that would require, in addition to professional skills in the relevant area, also the introduction of the digital dimension.
Yet, we hope that a positive answer to this question can be given because it appears hard to go back once advantages of the tech age have being tasted.
Once the emergency will be over and we can switch back to the ordinary word, it may be possible to envisage that companies would review their statutory provisions and their modus operandi.
Indeed, considering main doctrine that was expressed, as for Shareholders’ meetings (should by-laws be silent on that), the practice used during this emergency period might continue to apply, holding them fully by telecommunication means, whilst the signing of the minutes, either posthumous or simultaneous with their drafting, shall be made both by the Chairman and the Secretary.
Conversely, whether by-laws include provisions in this respect, an update of them might be considered in order to expressly acknowledge the experience acquired during the emergency period and thus make possible to hold the Shareholders’ meetings in a simplified way exactly as we are now practicing.
A similar approach may be followed for the resolutions of the Board of Directors. In fact, despite the silence of the Italian Legislator and the recommendation at hand, what has been observed up to now may well apply by analogy and a fortiori also to board meetings, given the smaller number of attendees and the fewer issues regarding the respect of the principle of the collegial method.
Therefore, following the same reasoning carried out for Shareholders’ meetings, if the by-laws do not include any of such provisions, an integration could permit, in line with the emergency practice, to hold board meetings fully by telecommunication means without requiring the concurrence of the Secretary and the Chairman, provided that both posthumous or simultaneous minutes can be taken.
Should the by-laws contain a provision requiring the necessary simultaneous presence of the Chairman and Secretary, we note that this rule shall be considered as merely functional to the simultaneous drafting of the minutes.
Consequently, such provision would not prevent from taking minutes after the board resolution, regardless of the presence of the two parties, and would also authorize to hold the meeting fully by telecommunication means.
Lastly, it should be noted that the place where the attendees of the meetings are located is even more marginal in case they are fully dematerialized, to the extent that in the emergency practice it is considered superfluous to include the location within the notice of call: this orientation could be accepted also in the future. Anyhow, it will be necessary to verify the interpretation that will be consolidated once the outbreak will be over and take into account how much dematerialized and delocalized meetings will become a common practice.
In light of all the above, it seems that the tragic experience of COVID-19 outbreak may also bring with it the opportunity to introduce a radical change in company law: without denying its solid foundations and the principle of collegiality in the decisions-making process, a step towards the corporate meetings of the future could be made, with technology as an intrinsic tool of the law.
PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti