Conflict of Interest, Secrecy and Insider Information of Directors, A Comparative Analysis

Abstract

The duty of loyalty is highly developed in Anglo-American countries, while in continental European countries it has only received more hesitant attention. Yet more recently there are tendencies toward convergence. These tendencies stem from company law scholarship, but also from more institutionally driven developments such as the independent director movement, corporate governance codes, and, to a certain degree, the harmonization efforts of the European Commission and the general influence of US American law on European company law and practices. This article concentrates on conflicts of interest, secrecy and insider information of corporate directors in a functional and comparative way. The main concepts are loans and credit to directors, self-dealing, competition with the company, corporate opportunities, wrongful profiting from position and remuneration. Prevention techniques, remedies and enforcement are also considered. The main jurisdictions dealt with are the European Union, Austria, France, Germany, Switzerland and the UK, but references to other countries are made where appropriate.

This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.

Keywords: Comparative company law, boards in Europe, duty of loyalty, conflicts of interest, board secrecy, insider dealing, loans to directors, self-dealing, competition with the company, corporate opportunities, directors' remuneration, remedies, enforcement