Navigating the Company’s Interest in Italy: An Interplay of Legal Concepts

The chapter explores the multifaceted notion of the company's interest within the Italian legal system, and examines how this concept is inferred through legal interpretation, judicial practice and evolving governance standards. It begins with a critical analysis of Article 2247 of the Italian Civil Code, which sets out the traditional, profit-driven purpose of companies. It then investigates the tension between shareholder primacy and broader stakeholder considerations, analysing the contract and institutionalist theories of corporate purpose and their influence on directors’ fiduciary duties. The chapter then delves into the Italian società benefit framework, which formally allows companies to integrate social and environmental objectives alongside profit-making, highlighting both its contractual flexibility and interpretative ambiguities. Additionally, it evaluates the Corporate Governance Code for listed companies and its emphasis on “sustainable success." The final section looks at how concerns about sustainability are increasingly part of a director's duty of care, especially in the face of environmental risks and regulatory developments. Overall, the chapter argues that, although profit remains the cornerstone of corporate purpose, Italian law now permits, and is increasingly requiring, companies to incorporate sustainability into their governance frameworks.