On the basis of the provisions in force as of 1 January 2004, the administration of joint-stock companies may be organised according to three separate models: the traditional model, the monistic model (of Anglo-Saxon origin) and the two-tier model (of German origin).
In the traditional model, the directors have the task of running the company, and are accordingly provided with the power of being pro-active i.e. promoting the decision-making activity of the meeting (power of initiative), of implementing the decisions of the shareholders (executive power), of deciding on the acts of management of the corporate enterprise (power of management in the strict sense) and of expressing the corporate will outside of the company, acting in the name and on behalf of the company (power of representation).
The management competence attributed to the directors is of a general nature and comprises all actions to be carried out in order to achieve the corporate purposes, which are not explicitly reserved to the competence of the other bodies by the law.
One or more persons may constitute the administrative body: in both cases the administrative body is unitary and, if there are several directors, they belong to a collegial body (board of directors) which chooses a chairman from among its members, if the latter has not already been appointed by the meeting or in the Memorandum of Association. The number of members of the board of directors is laid down in the Memorandum of Association, which however may merely indicate a minimum and a maximum number.
In this case, unless otherwise agreed in the by-laws, it is up to the ordinary shareholders’ meeting to determine in practice how many directors it wants to appoint and whether it wants the company to have a sole director or several directors.
A peculiar figure is the chairman of the board of directors, who has the typical functions of chairing the board and thus of leading the board meetings; he convenes the board meetings, checks that the secretary has drawn up the minutes of the meetings and that the board decisions are entered into the company book and performs all the other duties established by the law. At times the Chairman has management competences, in such case he has both the role of chairman and that of managing director.
So much for the traditional system. In the two-tier system, instead, management competencies are entrusted to a management board, elected by the supervisory board, which in turn is elected by the shareholders’ meeting. There are specific provisions envisaged by the law that apply to these bodies, and where no specific legislation is provided, then the general provisions on management and control shall apply. For the monistic system, the rules governing management activities have not undergone major changes: the control system has instead been heavily affected.