Study on Directors’ Duties and Liability in Europe

427 Pages Posted: 23 Jul 2021

See all articles by Carsten Gerner-Beuerle

Carsten Gerner-Beuerle

University College London - Faculty of Laws; European Corporate Governance Institute (ECGI)

Philipp Paech

London School of Economics - Law Department

Edmund Schuster

London School of Economics - Law Department

Date Written: 2013

Abstract

The liability regime of executive and non-executive directors in companies constitutes a necessary corollary to control issues within a company. It is based on the determination of specific duties, it establishes the limits of management behaviour and it provides stakeholders and third parties dealing with the company with legislative protection against management misconduct. In that respect, directors' liability is an important and effective compliance and risk-allocation mechanism. The European Commission has not, to date, considered directors' liability issues in a comprehensive way. It is the purpose of this study to provide the relevant information in a comprehensive manner, in order to support to European Commission to consider its future policy in this area. To this end, the analysis spans from national laws and case law to corporate practice in respect of companies’ directors duties in all 27 EU Member States and Croatia.1 The overarching goal is to provide for a better understanding of certain important drivers of directors' behaviour. This study shows the extent to which the content and extent of duties and the corresponding liabilities, as well as the understanding of the persons to whom they are owed, fluctuate over the life of a company, i.e. during the "normal" phase of operation, and in the so called "twilight zone", i.e. shortly before insolvency. The study is mainly a stocktaking one. However, its comparative analysis also identifies similarities and differences between national regimes and identifies relevant cross-border implications.

Keywords: directors' duties; EU company law; duty of care; business judgment rule; duty of loyalty; fiduciary duties; derivative action

JEL Classification: K22

Suggested Citation

Gerner-Beuerle, Carsten and Paech, Philipp and Schuster, Edmund-Philipp, Study on Directors’ Duties and Liability in Europe (2013). Available at SSRN: https://ssrn.com/abstract=3886382

Carsten Gerner-Beuerle

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

HOME PAGE: http://https://www.ucl.ac.uk/laws/people/carsten-gerner-beuerle

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/carsten-gerner-beuerle

Philipp Paech

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

Edmund-Philipp Schuster (Contact Author)

London School of Economics - Law Department ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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