New study on EU company board member duties and liabilities
The study on ‘Directors’ Duties and Liability’ (2013) ordered by the European Commission provides a detailed analysis of national laws, case law and corporate practice regarding company director duties of the EU Member States.
This study enables the European Commission to consider the future policy in this area by having a more profound understanding of directors’ behavior, which has been presented in a comparative way, i.e. by identifying similarities and differences between 28 country national legal frameworks. For example, in Estonia (pp.224-263) directors’ rules are defined by a combination of both statutes and case law; Latvia bases its framework upon the principles of private law contained in the Commercial law (pp.489-517) and in Lithuania the corporate law is based on statutes and regulated by the Civil Code, Law of Companies and laws regulating specific sectors (pp.521-542).
Thus, the detailed reports of each country included in the Annex focus on: 1) the organization and structure of boards in Europe as there are considerable variations between the EU Member State company laws; 2) the comparison of the substantive law governing directors’ duties as the general approach towards director duty regulations is different across the EU Member States; 3) the questions of enforcement; 4) the duties in the vicinity of insolvency; 5) the real seat influence which determines directors’ duties.
The study concludes that there are less differences in respect to the substantive rules on directors’ duties but more in relation to enforcement due to: a) incentive problems with regard to enforcement by (minority) shareholders; b) incentive problems related to the enforcement of claims against insolvent company directors; c) differences between the companies with cross-border operations; d) differences in director disqualifications.
For a more profound insight of the present study please see here.