Corporate Harm to Communities and Director Liability: A Comparison of Italy and Canada

Abstract

This research investigates corporate harm to local communities between Italy and Canada to strengthen their protection through corporate governance measures. Despite growing regulatory pressure for corporations to limit socio-environmental impacts, Italy offers only limited safeguards to prevent or remedy such harm. Adopting a commons-inspired theoretical framework and undertaking comparative analysis with Canada - where stakeholder-oriented corporate governance has been widely debated in law and scholarship - the research asks whether Italian corporate law provides a basis for recognizing a director's duty not to harm negatively affected communities. The study concludes affirmatively, identifying directors' duty to establish and implement adequate risk-management arrangements - a subtype of the duty of care - as a suitable statutory foundation. This conclusion is reinforced through analysis of Canadian cases and scholarly critiques, offering a robust legal and argumentative basis to affirm sustainability-oriented obligations for directors in Italy and extending prior scholarly proposals. Additional contributions include theoretical and methodological innovation and the development of a general framework for identifying communities as corporate stakeholders, which can guide the practical implementation of the proposal and support future research on corporate obligations towards local communities. Overall, the research shows how progressive statutory interpretation, based on inclusive conceptual considerations and supported by comparative insights, can inform legal innovation and enhance protections for communities impacted by corporate activity, providing pathways for advancing stakeholder-oriented governance in Italy.