The Liability of Directors in Fraudulent Bankruptcy: An Analysis of Supreme Court Ruling 23175/2025

The business world is a complex ecosystem, where each actor has a well-defined role and responsibilities. Among these, the board of statutory auditors plays a crucial role in overseeing and monitoring company management. But what happens when a company faces financial distress and crimes such as fraudulent bankruptcy occur? To what extent can directors be held criminally liable for omission? The Supreme Court of Cassation, with its recent ruling no. 23175 of May 28, 2025 (filed on June 20, 2025), offers fundamental clarifications, outlining the boundaries of the liability of board of statutory auditors members. This decision, which saw S. Q. as the defendant and Dr. M. E. M. as the rapporteur, partially annulling with referral the decision of the Court of Appeal of Genoa, represents an essential reference point for understanding the scope of the "guarantee position" in corporate criminal law.

The Role of the Board of Statutory Auditors and the "Guarantee Position"

The board of statutory auditors, in every capital company, is the body responsible for overseeing the company's administration, its organizational, administrative, and accounting adequacy, and compliance with the law and the company's articles of association. By virtue of their function, directors hold a true "guarantee position" (ex art. 40, paragraph 2, Italian Criminal Code), meaning they have a legal duty to prevent harmful events within their sphere of control. In the past, this guarantee position has often led to expansive interpretations of directors' liability, almost as if it automatically stemmed from the mere failure to exercise oversight duties in the presence of corporate or bankruptcy offenses. However, more recent case law has begun to temper this view, seeking a balance between the need to sanction culpable omissions and that of not turning directors into mere "scapegoats" for every corporate failure.

The Supreme Court Ruling: Omission is Not Always Complicity

The ruling under examination fits precisely into this context, providing a more calibrated interpretation of liability for complicity through omission by directors in fraudulent bankruptcy. The Supreme Court reiterated a key principle, which is worth quoting in full to grasp its full scope:

In matters of fraudulent bankruptcy, liability for complicity through omission by members of the board of statutory auditors does not automatically arise from the guarantee position held and the failure to exercise general oversight duties, but requires verification of the existence of specific preventive powers to be compared with a specific offense in its concrete factual dimension, as well as the actual causal impact of the omitted exercise of oversight duties on the commission of the offense itself.

This maxim is of fundamental importance. It clarifies that a director's criminal liability for complicity by omission (art. 110 Italian Criminal Code in relation to art. 40, paragraph 2, Italian Criminal Code) cannot be presumed. It is not enough, therefore, to note that the director did not exercise their general oversight duties and that a fraudulent bankruptcy offense was committed in the meantime. The Court requires a much more in-depth and concrete analysis. It must be demonstrated, on the one hand, that the director had specific, actual, and not merely theoretical powers to prevent that particular offense, and on the other hand, that their omission was causally decisive for the commission of the offense itself. In other words, there must be a direct and unequivocal link between the director's "inaction" and the "action" of the offense.

Legal References and Jurisprudential Precedents

The ruling is based on a solid legal framework, referencing, in addition to articles 40 and 110 of the Italian Criminal Code, also articles 216 and 223 of the Bankruptcy Law, which respectively govern fraudulent bankruptcy and other bankruptcy offenses. These articles define the typical conduct of the offenses, but the Supreme Court, with ruling 23175/2025, focuses on omissive participation. For the establishment of such liability, the Court requires the rigorous ascertainment of the following elements:

• The existence of specific preventive powers held by the director, capable of preventing or interrupting the illicit conduct.
• A precise comparison of these powers with the concrete factual dimension of the fraudulent bankruptcy offense. This is not an abstract control, but a verification linked to specific circumstances.
• The actual causal impact of the omitted exercise of oversight duties on the commission of the offense. It is necessary to demonstrate that, had the director acted, the offense would not have occurred or would have occurred in a different manner.

This interpretative line is not entirely new, but ruling 23175/2025 strengthens and clarifies it. Previous rulings, such as those cited (No. 15360 of 2010, No. 20867 of 2021, No. 18985 of 2016), had already begun to outline a more selective approach, rejecting automatic assumptions and favoring the ascertainment of the causal link and the concrete possibility of intervention. The jurisprudential trend, therefore, is aimed at greater specificity in the assessment of fault and causality within the scope of complicity by omission.

Practical Implications for Corporate Governance

This ruling has a significant impact on both directors and companies. For members of the board of statutory auditors, it serves as a reminder not to limit themselves to formal oversight but to exercise their powers proactively and effectively, equipping themselves with the necessary tools and information to intervene. At the same time, it offers protection against automatic and unjustified accusations, placing the burden of proof on the prosecution to demonstrate the concrete possibility of prevention and the causal link. For companies, it underscores the importance of structuring robust governance, with clear information flows and internal control mechanisms that enable directors to effectively fulfill their duties. Clarity on powers and responsibilities is essential to prevent illicit activities and ensure proper corporate management.

Conclusions

Supreme Court Ruling no. 23175 of 2025 marks an important step in defining the liability of directors in cases of fraudulent bankruptcy. Moving beyond the idea of automatic liability linked to a mere "guarantee position," the Court requires rigorous and concrete analysis, focusing on "specific preventive powers" and the "actual causal impact" of the omission. This approach ensures greater fairness, avoiding the attribution of generic blame while simultaneously encouraging a more conscious and targeted exercise of control functions. For legal professionals and all stakeholders in corporate life, this ruling is a call for the need for careful assessment of circumstances and roles, for justice that is both effective and fair.