231: why is an organizational model required?

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231: why, what it is for, and what is at risk?

Di cosa parla la legge 231

Companies cannot be subject to criminal liability (societas delinquere non potest). So why is a model required by Legislative Decree 231/2001?

For several years, legal entities in Italy were neither prosecuted nor convicted of criminal offences.

In Italy, companies could not be held vicariously.

Legislative Decree 231 of 2001 has marked a significant shift in the legal landscape.

Under 231 Act, companies, businesses, corporations, and associations can now be prosecuted, regardless of their size or sector of business.

Two legal requirements have to be met:

  • a company must have benefited from its own directors’ or employees’ wrongdoing;
  • the wrongdoing must be specifically prohibited by the law.

If both of these conditions are met, the company can be prosecuted and, if convicted, can face a range of penalties, including a striking off order.

The 231 organizational model

There is only one proven way to prevent a company from being convicted.

An organizational model is an internal control system that a company is required to maintain. This ensures that ethical standards of conduct are maintained in compliance with the law.

The primary purpose of the 231 model is to prevent wrongdoing from occurring both internally and externally.

The model presents an orderly structure that outlines a company’s growth plans and helps prevent any criminal convictions whilst strengthening both company structure and reputation.

Companies can benefit from implementing a robust risk management system, while consistently maintaining high-quality standards.

What is the purpose of the 231 organizational model?

An effective organizational model protects companies from their own directors’ and employees’ crimes.

The 231 model is a document that reflects the company’s specific characteristics, ensuring comprehensive and effective protection from the crippling consequences of wrongdoing.

For this very reason, it must be tailored to each individual company.

It must take into account the company’s business, its individual production processes, the context in which it operates, and the stakeholders with whom it interacts.

The 231 organizational model consists of several parts:

  • individuazione delle aree di rischio;
  • principi e procedure di controllo;
  • analisi e regolamentazione dei comportamenti ammessi e vietati;
  • sistema disciplinare e sanzionatorio;
  • catalogo dei reati;
  • codice etico;
  • istituzione di un organismo di vigilanza.

To be effective, a model must accurately reflect a company’s individual circumstances, and a well-designed model can shield a company from liability.

This can only be achieved by appointing a supervisory board that is independent of the executive leaders and is entrusted with responsibility for closely monitoring compliance with the model requirements.

The organizational model is the only proven way to protect a company from being convicted of wrongdoing.

What are the risks of not having the 231 model?

Under 231 Act, a company that benefits from its own directors’ or employees’ wrongdoing may face hefty penalties.

More specifically, a company may

  • sanzioni interdittive, che possono avere anche durata illimitata:
    • interdizione dall’esercizio dell’attività;
    • sospensione o revoca di autorizzazioni, licenze econcessioni;
    • divieto di contrattare con la Pubblica Amministrazione;
    • esclusione da agevolazioni, finanziamenti, contributi o sussidi e revoca di quelli concessi;
    • divieto di pubblicizzare i propri beni o servizi;
  • sanzioni pecuniarie, che possono arrivare fino a 1.549.000 euro;
  • confisca del prezzo o del profitto del reato;
  • pubblicazione della sentenza di condanna.

The company’s only defence to such hefty penalties is to prove that a robust 231 model was in place.

Why is it important to implement it?

Implementing a 231 organizational model has significant advantages for a company.

On the one hand, as we have already specified, the model allows for the reduction or cancellation of penalties for any wrongdoing specifically prohibited by the law.

This ensures the continuity of the company’s operations whilst protecting its assets.

There are other benefits to be had from implementing a 231 model.

It improves a company’s management performance by reducing or strengthening its organizational structure.

It produces higher levels of legality and ensures full compliance with workplace health and safety laws.

It promotes a culture of compliance and prevention within the organisation, resulting in improved reputation among third parties.

A code of ethics is meant to define clear and transparent standards of conduct, making a positive contribution to the way the company is perceived by third parties.

Finally, it provides access to public tenders, as well as several subsidies and tax incentives.

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