Legal liabilities of corporate management
As a result of the increasing legalization of commercial activities and the constantly improving organization of investors and shareholders, as well as the ever growing sensitivity of the general public and of stakeholders, the risk of claims being brought against members of a company´s management has increased sharply. This affects Members of the Board of Directors and of the Supervisory Board of PLCs as well as the Directors and Members of Advisory Boards of limited liability companies. And the increase in risk is not only limited to German legislation. As a result of increasing international links, German company executives are also exposed to liability risks from foreign jurisdictions.
The sheer number of liability reasons makes this area extremely complicated. In Germany alone, a considerable liability already exists under fiscal law (in particular income and turnover tax), under capital market law (ad-hoc disclosures, etc.) under Corporate Compliance (failure to maintain a required organizational structure), under product liability law, from infringements of obligations of bodies of the company (in particular in respect of the obligation to monitor supervisory boards), etc. At international level there are also, in particular, potential liabilities under the US and British anti-corruption law.
The advice required by all companies and, in particular those with international links must not be ignored in order to keep, in particular, members of the boards of companies free from liability. Under criteria of existing legislation, companies are even entitled to claim damages from members of their own boards if they have failed to obtain respective legal advice.