In September, we will jointly examine the conduct of directors in accordance with the standard of due care when outsourcing activities falling within their remit, in the light of decision 27 Cdo 3331/2025.
As a general rule, the board of directors may, in principle, delegate the performance of activities falling within its remit to a third party, unless otherwise provided for by law or the articles of association. Typically, this approach is justified when directors lack the necessary knowledge or skills, or do not have enough time to carry out the activity in question whilst fulfilling their other duties. However, even the decision to delegate must be taken with due care, that is to say, in an informed manner, with the necessary diligence and the requisite loyalty to the company.
In the case in question, the company entered into agency agreements with companies linked to members of its board of directors through shareholdings and personnel ties. Their role was to identify potential marketing partners, liaise with them, negotiate and enter into marketing agreements, and handle the associated administrative tasks. The Supreme Court had no doubt that these activities fell within the remit of the board of directors.
However, it emerged from the findings of fact by the lower courts that it was the members of the board of directors themselves who acted on behalf of the third-party companies when communicating with potential marketing partners.
It is precisely this example that illustrates the limits of permissible delegation. If a member of the board of directors possesses the necessary knowledge, skills and time, they are obliged to make use of them to the best of their ability in the performance of their duties. If the director delegates activities falling within his remit to a company under his control in return for payment and subsequently carries them out personally on its behalf, he is effectively and impermissibly “hiring himself” to carry out activities which he is already required to perform by virtue of his position.
According to the Supreme Court, such conduct is not in compliance with the duty of care expected of a prudent manager and the requirement of due loyalty to the company. Nor does the fact that the company’s financial situation subsequently improved change this in any way. A favourable outcome does not, in itself, mean that the decision on delegation was taken correctly. The reason for involving a third party must be assessed on the basis of the circumstances known at the time the decision was taken, not retrospectively on the basis of the results achieved.
In terms of corporate practice, the ruling points out that outsourcing can be beneficial, but that it is subject to certain conditions and limitations. Any decision on this matter must be taken with due care and must be based on a reasonable ground that is justifiable in the interests of the company.
