Behavioural Criteria for the Head of Corporation within Reasonable Business Risk

18 Pages Posted: 6 Aug 2020

See all articles by Sergey Sosnovskikh

Sergey Sosnovskikh

De Montfort University

Oxana Cherkasova

affiliation not provided to SSRN

Date Written: April 9, 2020

Abstract

This paper discusses the essence of the entrepreneurial risk, ethical and legal standards, which must be adhered to by the head of a commercial organisation. In the Russian legislation, there is debate concerning the boundaries of the responsibilities of the corporate manager. Existing literature doesn’t contain many studies about the norms on the responsibility of persons authorised to act on behalf of a legal entity because it is new for Russian civil legislation, which shows the novelty of this study. We identify problematic aspects that arise both in the doctrine and judicial practice regarding the determination of the criteria of good faith and reasonable behaviour of the head of the corporation. Our study examines the legal nature of entrepreneurial risk and how it affects the formation of managerial decisions. As a result, we propose a basic model of the criteria for the good behaviour of a corporate manager within a reasonable entrepreneurial risk.

Keywords: entrepreneurial risk, business risk, corporate governance, corporate conflict, good faith, reasonableness, Corporate Law, Civil Law, Russia

JEL Classification: K15, K33, M14, G34

Suggested Citation

Sosnovskikh, Sergey and Cherkasova, Oxana, Behavioural Criteria for the Head of Corporation within Reasonable Business Risk (April 9, 2020). Available at SSRN: https://ssrn.com/abstract=3647125 or http://dx.doi.org/10.2139/ssrn.3647125

Sergey Sosnovskikh (Contact Author)

De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

Oxana Cherkasova

affiliation not provided to SSRN

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