Management of Solvency and Liquidity: A Comparison of Swiss and Italian Law

Poor management of solvency and liquidity can lead to major corporate crises and ultimately insolvency. The Board of Directors must manage company liquidity accurately and attentively, even when there are no signs of imminent crisis. The Board is responsible for proper and timely liquidity planning, adopting measures to ensure and improve liquidity, and constant liquidity monitoring through internal control mechanisms. These tasks should be cyclically updated based on new developments. To optimize corporate liquidity, measures to improve cash flow and liquid funds, and reduce uncovered credit positions should be considered. A liquidity plan with a 12-month horizon, updated regularly, is recommended. The article compares how Swiss and Italian regulations govern the responsibilities and tasks of corporate administrative bodies in managing liquidity and preventing corporate crises.
This article was jointly prepared by Rocco Rigozzi and Andrea Ziswiler (partners at Bär & Karrer, Lugano and Zurich) for the Swiss side, and Cristina Fussi and Stefania Merati (respectively partner and senior associate at De Berti Jacchia, Milan) for the Italian side.