Directors' Non-Compete Obligation after Legislative Decree 47/2026

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1. Overview of the reform

Legislative Decree No. 47 of 27 March 2026, in force since 29 April 2026, has reworded the provisions of the Italian Civil Code governing the management and control of joint-stock companies (S.p.A.).

The main structural change concerns Art. 2380 of the Civil Code. Until 28 April 2026, unless the articles of association provided otherwise, the traditional system (directors and board of statutory auditors) applied. The new wording no longer sets a default model: the articles of association must adopt one of the three systems provided for, all placed on an equal footing, namely the system with a board of statutory auditors, the system with a management board and a supervisory board, and the system with a board of directors and a management control committee. For existing articles of association the consequences are limited, as explained in section 5 below.

Among the other main changes introduced by the reform and discussed in this article, we highlight in particular the non-compete obligation (Art. 2390 of the Civil Code), which has significant practical and interpretative consequences under the related provisions (Arts. 2390-bis, 2396-bis and 2381-ter of the Civil Code).

2. Amendments to Art. 2390 of the Civil Code

2.1 The rule before the reform

In its previous wording, Art. 2390 of the Civil Code prohibited directors from becoming partners with unlimited liability in competing companies, from carrying on a competing business on their own account or on behalf of third parties, and from serving as directors or general managers of competing companies. The prohibition could be lifted by authorisation of the shareholders' meeting; practice also considered admissible a general, advance waiver set out in the articles of association, although its validity was disputed by some legal scholars.

Breach of the prohibition entailed removal from office and liability for damages.

2.2 The changes introduced by the decree

The decree (Art. 9(1)(m)) amends the first paragraph of Art. 2390 of the Civil Code in two respects, leaving the other prohibitions and the penalties unchanged.

Prohibited roles. A prohibition is added on serving as an executive with strategic responsibilities in a competing company. The Civil Code does not define this role, which was previously relevant under the rules governing listed companies and which, according to early commentary, now also becomes relevant for unlisted joint-stock companies. These are individuals who, while not holding the office of director, take part in the company's strategic decisions; the rationale of the prohibition is therefore similar to that applying to directors and general managers. According to the specialised press, this status must be assessed in light of the significance of the activity actually performed; it follows that the authorisation cannot merely refer generically to a managerial role, but must identify precisely the activity permitted.

Specific authorisation. Granting the waiver remains a matter for the shareholders' meeting, but the authorisation must now be specific. According to early commentators, this means that the shareholders' meeting must describe precisely the competing activity covered by the waiver and that the authorisation must be granted ad personam to each individual director. The same requirements should also be met by any authorisation contained in the articles of association. Early commentary also considers it advisable for the authorisation to specify the competing company or the competitive scope, its duration, any limits, and the measures aimed at preventing conflicts of interest and misuse of company information.

Some interpretative issues nonetheless remain open: whether the authorisation must always refer to a position actually taken up by a specific director; whether a general authorisation to take on certain roles is sufficient; and whether a blanket authorisation granted to a single director is sufficient.

2.3 Comparison of the two texts

The two versions can be compared as follows:

Prohibited roles in competing companies. Previous text: director or general manager. Text in force from 29 April 2026: director, general manager or executive with strategic responsibilities.
Waiver. Previous text: authorisation by the shareholders' meeting (validity of a clause in the articles of association disputed). Text in force from 29 April 2026: specific authorisation by the shareholders' meeting (validity of a clause in the articles of association still disputed).

3. Transitional rules: authorisations already granted

The changes raise a transitional issue. Suppose that, before 29 April 2026, a director was granted a general authorisation to carry on a competing business, either by shareholders' resolution or through a clause in the articles of association: the question is whether that authorisation remains effective after the new wording came into force or must be replaced by a specific authorisation. The decree contains no express provision on this point. Art. 11 sets the entry into force at 29 April 2026, fifteen days after publication in the Official Gazette, and the transitional provisions of Arts. 12-16 concern the financial markets (asset managers, funds, issuers). The only transitional rule linked to Art. 9 is Art. 11(10), which concerns information provided by the control body and not the non-compete obligation. The new Art. 2390 of the Civil Code therefore applies from 29 April 2026, with no special rules for earlier authorisations.

In the absence of a specific provision, the specialised press takes the view that competing activities already under way before 29 April may continue on the basis of the previous authorisations or clauses in the articles of association, whereas activities undertaken subsequently require a specific authorisation. This approach is consistent with the principle that laws do not have retroactive effect (Art. 11 of the Preliminary Provisions to the Civil Code).

4. Application to limited liability companies (S.r.l.)

The reform concerns joint-stock companies and does not expressly extend the non-compete obligation to limited liability companies. Since the 2003 company law reform, the rules governing S.r.l. no longer refer to Art. 2390 of the Civil Code, so whether the prohibition applies to the directors of such companies is a matter of debate.

Views on this point are not uniform. In 2004, notarial practice, in guideline I.C.16 of the Interregional Committee of the Notarial Councils of the Triveneto, considered the analogical application of the S.p.A. rules uncertain and recommended regulating the prohibition in the articles of association. The Italian Supreme Court, by contrast, has held Art. 2390 of the Civil Code to be applicable to S.r.l. as well, in view of the fiduciary relationship between directors and the company (Order No. 14226 of 2023, according to commentary on the ruling). The study on the reform by the Italian National Council of Notaries takes the same direction, noting that the prohibition tends in any case to be regarded as applicable by analogy with Art. 2390 of the Civil Code (Study No. 63-2026/I). The specialised press, conversely, refers for S.r.l. only to the rules on conflicts of interest, which concern individual transactions rather than the business as a whole.

5. Updating the articles of association

The question arises whether articles of association drafted before the reform need to be amended. As a general rule, the answer is no. For unlisted companies the decree imposes no adjustment requirement: the only obligation to amend the articles applies to listed companies (Art. 11(9), in conjunction with Art. 147-bis.1 of the Consolidated Law on Finance – TUF). The study by the Italian National Council of Notaries (No. 63-2026/I, approved on 25 June 2026) states that a general overhaul is not necessary: the reform mainly consists of a repositioning of articles, accompanied by certain substantive changes, so a clause-by-clause review is required. Only in some cases is an amendment necessary or advisable.

An amendment is necessary where the articles of association do not make it possible to determine with certainty which of the three management and control systems has been adopted, for example because they list all of them and leave the choice to the shareholders' meeting. In other cases it is not required: where the articles regulate the board of statutory auditors, the traditional system has already been adopted, and references to renumbered or amended articles are, as a rule, to be read as referring to the new provision.

With specific regard to the non-compete obligation, the study distinguishes three types of clauses. Clauses that refer to the prohibition or define its scope follow the new provision, so the prohibition also covers executives with strategic responsibilities. Clauses that reproduce the previous wording, on the other hand, cannot be construed as authorising the new roles, since the new provision supplements the articles of association. Finally, the validity of clauses granting a general authorisation for competing activities was already disputed, and the specificity requirement lends weight to the argument of those who denied it; where their validity is accepted, according to the notaries' study they would also extend to the new roles.

An amendment to the articles may nonetheless be advisable to clarify the shareholders' intentions and correct numerical cross-references. In an S.p.A., where the amendment is a mere formal alignment of the articles, it could also be delegated to the management body, provided the relevant conditions are met (Art. 2365 of the Civil Code).

6. Related provisions

Alongside Art. 2390 of the Civil Code, the decree introduces further changes concerning directors' duties.

6.1 Art. 2390-bis: use of information

Directors may not use, for their own benefit or that of third parties, data, information or business opportunities learned in the course of their duties; in case of breach they may be removed from office and are liable for damages, and the provision does not allow any waiver by authorisation. The rule is not entirely new: Art. 2391 of the Civil Code, in its previous wording, already provided for liability for damages arising from such use. That provision has been moved to Art. 2390-bis of the Civil Code and now takes the form of a standalone prohibition, with removal from office expressly provided for.

6.2 Art. 2396-bis: general managers

Here the change is substantive. Art. 2396 of the Civil Code merely extended the rules on directors' liability to general managers appointed by the shareholders' meeting or under the articles of association. The new Art. 2396-bis of the Civil Code instead introduces, for general managers, a non-compete obligation and a prohibition on using information, with liability for damages; the waiver of the non-compete obligation is a matter for the company, not for the shareholders' meeting, and must be specific. The specialised press highlights two doubtful aspects: the provision does not mention executives with strategic responsibilities and, where the general manager is appointed by the directors, the authorisation could be granted by the directors themselves.

6.3 Art. 2381-ter: reasonable reliance

This is the most significant change in terms of liability: directors without delegated powers, in making their decisions, may reasonably rely on the information received in accordance with the law and the articles of association, also in light of their own specific expertise (Art. 2381-ter(4) of the Civil Code). This provision does not, however, amount to an exemption from liability. According to early commentary, the duty of active oversight remains, bounded by a reasonableness test: directors may rely on information flows that are consistent, complete and not manifestly unreliable, but must take action when warning signs arise, and their expertise is relevant in assessing their diligence. Coordination with the obligation to intervene where prejudicial facts are known is governed by Art. 2392(2) of the Civil Code.

7. Conclusions

The reform tightens the non-compete obligation: the range of prohibited roles has been extended and the authorisation must be specific. The effects on authorisations already granted and the applicability to S.r.l. remain to be clarified. In the meantime, it is advisable to review the articles of association and, for competing activities currently under way, to adopt a specific authorisation.