Requirements, duties and composition of the Supervisory Body

In general terms, we define the Supervisory Body as the authority responsible for supervising the liability of entities in the context of crimes committed to benefit the entities themselves. The Body’s role is to monitor and verify the compliance and effectiveness of the 231 Organizational Model, report any deficiencies, anomalies and violations or update the Model if necessary. For these reasons, this authority is paramount in the Model itself and the requirements compliance programs. 

It’s important to remind you that the 231 Organizational Model (Also called MOG 231) is a business management system that aims to identify all the operating procedures developed by the company to decrease the risk of crimes in the organization’s interest. 

The benefits of such models are numerous: the first is to excuse from penalties provided by Legislative Decree 231/2001 and to allow significant savings on costs deriving from any legal fees. In addition to that, it gives new possible business opportunities, as various public entities and companies require their suppliers to be equipped with MOG 231, and also greater control over internal processes at risk of crime. 

In addition to the functions listed above, the Supervisory Body is also responsible for the following tasks: 

• Propose adaptations of the Model, i.e., following changes in the company’s activity structure or according to the regulatory framework.
• Supervise and control the recipients’ observance and effective implementation of the MOG 231. 
• Manage and monitor information and training initiatives to spread knowledge and understanding of MOG 231 by its recipients.
• Manage and control the information received concerning the functioning of the Model.
• Identify activities at risk of crime.
• Provide controls aimed at preventing crimes.
• Identify methods to manage the financial resources that are necessary to stop or prevent crimes.
• Introduce adequate disciplinary systems to sanction failure to comply with the measures provided by MOG 231.

The requirements of the Supervisory Body 

In all its activities, the Supervisory Body must show attributes of independence, autonomy, continuity of action and professionalism. 

Autonomy and independence are necessary to exclude any admixture or coincidence between the controller and the controlled. For this reason, the Body must never be responsible for corporate operational tasks in areas at risk of “predicate offenses.”

Continuity of action is essential to ensure constant control over activities that are, so to speak, “sensitive” (i.e., at risk of crime), and the uninterrupted monitoring of the Model, which must be in line with corporate and regulatory developments. 

Finally, professionalism relates to two different competencies that members of the Body must always show: on the one hand, that of a juridical-criminal nature (especially relating to predicate offenses and the provisions of Legislative Decree 231/2001); on the other hand, technical-inspection knowledge, as it is essential for analyzing company systems. 

Appointment and composition of the Supervisory Body 

In the case of a small entity, Article 5, paragraph 4 of the Legislative Decree 231/2001 (“Discipline of the administrative liability of corporate body, companies and associations, including those without legal status, under Article 11 of Law no. 300 – September 29, 2000) states that the Supervisory Body may coincide with the administrative body of the company itself.

Generally, the Supervisory Body is appointed by the Board of Directors or, alternatively, by the entity’s Sole Director. However, it’s also essential to specify that our legal system does not dictate rigorous conditions regarding how the Body must be composed. Therefore, it may be monocratic (i.e., with only one member) or collective (i.e., with multiple subjects). The subjects of a collective Supervisory Body can be internal and external to the company, and their office will have a duration of three or five years – except for any subsequent renewal.

It is easy to understand that the composition of the Supervisory Body will depend on many factors: the entity’s size, type of activity, and organizational complexity. However, what will always be pivotal is to guarantee the burden of supervision and the effectiveness of controls. 

Sometimes, the presence of external members in the Supervisory Body proves to be the most effective solution to ensure the autonomy of activities, while that of internal members has the benefit of providing more in-depth knowledge of company dynamics. 

In its guidelines, Confindustria indicates a Supervisory Body with a monocratic composition as the most effective for micro and small enterprises, while the collective type is considered most suitable for medium or large organizations.

Finally, it is worth noting that, if the company has a board of statutory auditors, they may be in charge of supervising the adoption of the MOG 231. 

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