!Корпоративное право 2023-2024 / 2013-study-analysis_en

directors. Internally the directors may then take recourse against each other on the basis of their proportionate fault.200

For board resolutions we can derive the following principles from the case law, disregarding the (limited) variations that may exist in the Member States.

First, directors who vote in favour of resolutions in violation of directors’ duties are jointly and severally liable if they have acted with fault. As far as liability for negligent misconduct is concerned, this means that the assessment has to proceed on an individual level, since the applicable standard of care is defined in all Member States in consideration of circumstances that relate to the individual director.201 However, some jurisdictions use the fact that the director has participated in a board decision as a rule allocating the burden of proof. Following a recent judgment by the French Supreme Court,202 French law holds that once it is established that the resolution by the board constitutes a breach of duty (for which the claimant bears the burden of proof), the burden shifts to the director, who is required to show that ‘he behaved as a cautious and careful director, notably by opposing the decision’.203 Luxembourg,204 Maltese,205 and Dutch206 and Spanish law207 contain similar burden of proof rules.

Second, directors who vote against resolutions in violation of directors’ duties are in principle not liable. However, several jurisdictions provide that voting against the resolution alone is not sufficient to exonerate the director. Rather, the director must have attempted to change the decision, have his or her objection recorded in the minutes, and may need to inform the auditor of the resolution. Furthermore, liability may arise if the board proceeds with the implementation of the decision and the director does not take reasonable steps to prevent the implementation.

Third, the director may even face liability if he or she was absent while the board resolved to take the challenged decision. According to the decision of the French Supreme Court mentioned above,208 the rebuttable presumption of liability for the wrongful board resolution applies irrespective of the director’s presence or absence. Another ground for liability may be the director’s failure to attend the board meeting as such. In several Member States, it was emphasised that the directors have an obligation to participate in the decision-making by the board and that repeated absence may amount to negligence with regard to the director’s monitoring duty.209

While these principles are not equally well developed in all Member States, we have not identified any approaches clearly in contradiction of them. The most significant variation in the Member States seems to be the procedural function that joint and several liability assumes in Luxembourg, Malta, the Netherlands, and Spain. This is in particular relevant for jurisdictions where the burden of proof is normally with the plaintiff.210

200This is expressly provided for by Lithuanian law, see Art. 6.279(2) Civil Code, but constitutes a general principle underlying the law of joint and several liability in all Member States.

201This holds also for jurisdictions that define the standard of care in a largely objective way. Individual elements such as the function and position of the director in the company or the director’s experience and knowledge will always play a role in the evaluation of the case. For more details see the discussion above 2.4.2 ‘Variations in the standard of care and delegation’.

202Cass. Com. 30.03.2010 n°08-17.841, FP-P+B+R+I, n° 08-17.841, Fonds de garantie des dépôts (FGD) c/ Sté Caribéenne de conseil et d'audit: P. Le Cannu: RJDA 7/10 n°760. Revue des sociétés 2010 p. 304.

203For a more detailed discussion of this decision see the French Country Report, p. A 365. Luxembourg law contains a similar provision for so-called responsabilité légale, see the Luxembourg Country Report, p. A 672.

204In Luxembourg, the burden of proof shifts to the director in case of the so-called responsabilité légale, see the Luxembourg Country Report, p. A 672.

205Maltese Companies Act, Art. 147(2). See the Maltese Country Report, p. A 719.

206Dutch Civil Code, Art. 2:9.

207Spanish Corporate Enterprises Act, Art. 237.

208See n 202.

209For example, Finland and Sweden.

210See above 2.4.2 ‘Burden of proof’.

171 Directors’ Duties and Liability in the EU

2.7 Limitation of liability

Summary of the country reports

Table 2.7.a: Possibilities to limit directors’ liability

Country	Exclusion in	Ex ante	Ex post	Indemnification
	articles	authorisation by	ratification by	in third party
		shareholder	shareholders or	lawsuits or for
			waiver	costs of
				proceedings and
				D&O insurance
Austria	Not permissible	- Directors are not	Waiver and	D&O insurance is
		liable if they were	settlement may be	available;
		acting in	declared five	coverage
		accordance with a	years after the	excluded for
		lawful resolution	claim came into	intentional
		of the general	existence,	misconduct and
		meeting, s. 84(4)	provided that no	often also for
		AktG	minority of at least	gross negligence
		NOTE: this does	20% registers an
			objection, s. 84(4).
		not affect the
			In waiving the
		creditors’ ability to
			claims or entering
		enforce the
			into the
		company’s claims
			settlement, the
		against the
			company is
		director
			represented by
		- Approval by the
			the supervisory
		supervisory board
			board; the GM
		does not
			must give its
		exonerate the
			consent. The five
		directors
			year restriction
			does not apply if
			all of the
			shareholders give
			their consent.
			NOTE: waiver or
			settlement are not
			effective with
			respect to
			creditors and in
			bankruptcy.
Belgium	The validity of	Some case law	Permissible, the	- Indemnification
	such clauses is	holds that	conflicted director	permissible
	disputed, since	directors are not	can vote as	- D&O insurance
	the law on liability	liable when	shareholder.
				is available and
	of directors is	merely executing	However, the
				becoming more
	mandatory law. In	general meeting	waiver does not
				common
	any case, such a	decisions.	affect the rights of
	clause cannot be	However, this	third parties or the
	relied on against	does not free	right of minority
	third parties.	them from having	shareholders who
		to comply with the	do not approve
		Companies Code	the ratification to
		and the articles of	bring a derivative
		association and	claim.

172 Directors’ Duties and Liability in the EU

			does not
			constitute a
			ratification of other
			managerial errors.
Bulgaria		1) Duty of care:	The corporate		s. 221, no. 10: the	D&O insurance
		exclusion for	organ responsible		directors may only	available but not
		intentional	for appointing		be released from	common
		conduct and gross	directors can		liability by the GM;
		negligence not	exempt some or		according to
		permissible	all of the board		common practice,
		2) duty of non-	members from the		this happens at
			duty of non-		the annual
		competition, s.
			competition for		general meeting.
		237(4): can be
			specific		The director in
		excluded in the
			transactions, for		question can vote
		articles
			participation in		if he is also a
		3) duty of
			specific		shareholder.
		confidentiality, s.
			companies, for
		237(5), and duty
			certain periods, or
		to disclose to the
			generally
		company facts
		which may be
		relevant to the
		activity as
		directors, s.
		237(3):
		mandatory;
		exemption in the
		articles not
		permissible
Croatia		Not permissible	Permissible,		1) Ratification not	- Indemnification
			directors not liable		possible	possible under
			if their actions		2) Waiver:	some conditions
			were based on a
					permissible	- D&O insurance
			resolution by GM;
					a) after 3 years;	available but not
			the conflicted
						common
			director cannot		b) GM gives its
			vote as		consent; and
			shareholder		c) no objection
					from 10% minority
					shareholder
					The waiver is not
					valid to third
					parties, in
					particular the
					creditors
Cyprus		Not permissible	No general power		The general	- The company
			of shareholders to		meeting may	may indemnify
			exempt a director		accept	directors against
			from liability for		agreements that	the costs incurred
			breach of duty		are voidable	in legal
					pursuant to s. 191	proceedings in
					(self-dealing); but	which judgment is
					no general power	given in the
					of shareholders to	director’s favour
					exempt a director	or the director is
					from liability for
			173	Directors’ Duties and Liability in the EU

			breach of duty	acquitted
				- D&O insurance
				available but not
				common
Czech Republic	Not permissible, s.	Directors are not	No explicit	D&O insurance
	194(5)	liable for damage	provision; not	available
	Commercial Code	caused by their	permissible
		execution of a
		specific instruction
		of the general
		meeting, unless
		such instruction is
		illegal, s. 194(5)
Denmark	Not permissible	Not permissible	- The GM can	D&O insurance
			grant a discharge	available, but not
			or waive liability	common in small
			with simple	and medium-sized
			majority; the	enterprises; even
			waiver is binding	in large listed
			on the company if	companies
			the information	directors are not
			received by the	always covered by
			GM was	D&O insurance
			essentially correct
			and complete, s.
			364(2)
			- If 10% minority
			shareholders
			oppose waiver,
			any shareholder
			can commence
			legal proceedings
			to recover
			damages for the
			company, s.
			364(3)
			- If the company is
			declared
			bankrupt, the
			waiver is no
			longer binding,
			provided that the
			bankruptcy
			petition is not
			presented later
			than 24 months
			after the waiver, s.
			364(4)
Estonia	Restriction of	Breaches of the	Waiver valid if:	D&O insurance is
	liability to, for	duty of care: the	- resolution of the	available, but not
	example, gross	director is		widely used due
			supervisory board
	negligence in the	exculpated if he		to the high
			- all significant
	articles is	acts on the basis		insurance
			circumstances
	permissible (but	of a lawful		premium (except
			about the breach
	not valid in	resolution by the		in international
			of duty were
	relation to third	general meeting		group companies)

174 Directors’ Duties and Liability in the EU

	parties or the	or the supervisory	disclosed and
	liquidator); in	board	known to the
	addition, limitation		supervisory board
	or waiver of		- explicit waiver
	liability for
			with regard to a
	intentional breach
			specific breach of
	of duty is not valid
			duty
			BUT: creditors
			and the liquidator
			can enforce the
			claim in spite of
			the waiver
Finland	- Possible, except	Unanimity of the	The annual	D&O insurance
	for deliberate	shareholders	general meeting	available and
	actions and gross	required.	decides on a	fairly common,
	negligence (Ch.		discharge of the	especially in listed
	22, s. 9(1)).		board of directors,	companies, but
	Exclusion applies		which constitutes	also in a number
	only to liability		a waiver of the	of private
	against the		company’s claims,	companies
	company, not		provided that the
	shareholders and		information given
	third parties.		to the AGM was
	- The right of the		materially correct
			and sufficient (Ch.
	company to
			22, s. 6(2)). The
	damages may
			director in
	otherwise only be
			question must
	restricted by the
			abstain from
	articles of
			voting as a
	association with
			shareholder.
	the consent of all
	shareholders (Ch.		The discharge is
	22, s. 9(2))		not binding in
			bankruptcy and
			the administrator
			can file a suit if
			the proceedings
			have started
			within two years
			from the director’s
			action.
France	Not permissible,	Not permissible,	Not permissible,	D&O insurance
	Art. L.225-253	Art. L.225-253	Art. L.225-253	available and
	Commercial Code	Commercial Code	Commercial Code	common in listed
	(for public	(for public	(for public	companies;
	companies)	companies)	companies)	infrequently used
				in non-listed
				companies
Germany	Not permissible	Exculpates	1) Waiver: s. 93(4)	D&O insurance
		directors for	- requires a	available and
		breaches of the		common in the
			resolution of the
		duty of care, s.		public stock
			general meeting
		93(4). As regards		corporation (AG);
			not later than
		self-dealing and		mandatory
			three years after
		the duty not to		retention of 10%,
			the claim came
		compete with the		s. 93(2) sentence

175 Directors’ Duties and Liability in the EU

			company, the		into existence,	3
			supervisory board		and no objection
			can give ex ante
					by 10% minority
			authorisation
					shareholder
					- the waiver is not
					valid in relation to
					creditors, s. 93(5)
					2) ex post
					approval of
					competitive
					conduct (s. 88) by
					the supervisory
					board is not
					permissible
Greece		Not permissible	No liability if the		Waiver: possible	D&O insurance
			director’s action		pursuant to Arts.	available, but not
			was based on a		22a(4), 35, but not	common
			lawful resolution		earlier than two
			of the GM, Art.		years after the
			22a(2)		claim was
					established; the
					GM must consent
					and there should
					be no objections
					from minority
					shareholders
					representing 20%
					of the capital
Hungary		Under principles	In single-member		The general	D&O insurance
		of agency law,	companies		meeting decides	available, but not
		liability can be	directors may be		on a discharge of	common
		excluded, except	instructed in a		the board of
		for intent, gross	written form by the		directors, which
		negligence, or	shareholder; if the		constitutes a
		criminal	director acts		waiver of the
		behaviour. In	according to such		company’s claims,
		addition, the	instructions,		provided that the
		director’s salary	he/she is not		information given
		must be reduced	liable. In other		to the GM was
		proportionally.	companies,		correct and
			directors are		sufficient.
			bound by the
			decisions of the
			GM and are
			supposed to act in
			compliance with
			them. Thus, a
			majority vote in
			GM can have the
			effect of ex-ante
			authorisation.
Ireland		Companies Act	- Shareholders		- Shareholders	- It is permissible
		1963, s. 200(1):	can authorise		can ratify a breach	for a company to
		any provision in	conduct which		- No conclusive	indemnify a
		the company’s	would otherwise			director against
					judicial statement
		articles of	be a breach of			the costs in
					on the question of
			176	Directors’ Duties and Liability in the EU

		association or any	duty		whether the	relation to
		contractual	- No conclusive		conflicted director	proceedings
		provision which			can vote	which were
			judicial statement
		exempts a director				successfully
			on the question of
		or indemnifies				defended or in
			whether the
		him/her against				relation to a
			conflicted director
		liability “in respect				successful
			can vote; these
		of any negligence,				application for
			matters are
		default, breach of				relief under s.391,
			usually settled at
		duty or breach of				see Companies
			board level. The
		trust” is void				Act 1963, s.
			conflicted director
						200(b)
			is entitled to vote
			in such cases			- D&O insurance
						available, but not
						common, except
						in large listed
						companies
Italy		Possibly	No rules in the		Waiver: by	D&O insurance
		permissible for	Civil Code, but the		ordinary resolution	available and
		breaches of	provisions on ex		of the GM,	common in large
		negligible	post resolution		provided that	companies; rarely
		importance (colpa	may apply by		there are no	used in small and
		lieve)	analogy		objections from	medium-sized
					minority	enterprises
					shareholders
					representing 20%
					of the capital
Latvia		Not permissible	1) No liability if the		The GM may	D&O insurance
			director acted		release directors	available, but not
			bona fide		from liability for	common
			according to a		specific actions
			lawful decision of		after disclosure of
			the general		such actions to
			meeting (i.e. the		the GM.
			resolution must		NOTE: The
			have been legal
					release does not
			and within the
					limit the right of
			powers of the GM)
					minority
			2) Supervisory		shareholders to
			board approval		bring a derivative
			not sufficient		action or the rights
					of the creditors
					and administrator
					in insolvency
					proceedings
Lithuania		Permissible,	- Art. 34(5) of the		Supreme Court:	D&O insurance
		except for	Law on		ratification by the	available, but not
		intentional fault or	Companies: The		shareholders does	common
		gross negligence,	articles of		not exclude or
		Civil Code, Art.	association may		limit the directors’
		6.252	provide that the		liability
			board must obtain
			the approval of
			the general
			meeting of
			shareholders
			177	Directors’ Duties and Liability in the EU

			before adopting
			the decisions
			referred to in
			subparagraphs 3,
			4, 5 and 6 of
			paragraph 4. The
			approval of the
			GM shall not
			release the board
			from responsibility
			for the decisions
			adopted.
			- Generally,
			ratification by
			shareholders
			(even if ex ante)
			does not limit the
			responsibility of
			directors (as to
			any fiduciary duty)
Luxembourg		Permissible in the	There is no case		- Discharge by the	- Indemnification
		articles of	law as to whether		GM has the	permissible,
		association or in	a director could be		consequence that	except for
		particular	allowed ex ante		the company	intentional fault,
		agreements	by the		waives its right to	gross negligence,
		between the	shareholders to		enforce claims	or criminal liability
		director and the	take a particular		against the	- D&O insurance
		company. Some	action and be		directors for
						is available and
		limits apply	absolved of		management
						has become very
		(voluntarily	liability. Belgian		errors (provided
						common
		agreed, without	case law should		the director did
		fraud, not	be applied here		not act
		prohibited by a	and holds that		intentionally); this
		particular legal	such a vote would		applies to liability
		provision, legal	be effective.		under Art. 59(1)
		principles, or to			as well as 59(2)
		protect creditors			- In relation to
		or the general
					third parties, the
		interest)
					discharge has no
					effect
Malta		Not permissible,	The shareholders		Shareholders can	- Indemnification
		Art. 148(1)	can authorise		release a director	not permissible,
			related party		from liability for a	Art. 148(1), with
			transactions and		fully disclosed	the exception of
			allow the director		breach of duty	indemnity against
			to compete with			liability incurred by
			the company			the director in
						defending any
						proceedings in
						which judgment is
						given in his/her
						favour or in which
						he/she is
						acquitted
						- D&O insurance
						available, but not
			178	Directors’ Duties and Liability in the EU

						common
Netherlands		Exclusion of	Ex ante exclusion		Discharge by the	D&O insurance
		liability in the	of liability for		GM is valid if	available and very
		articles is contrary	serious		based on correct	common, also for
		to binding law (s.	mismanagement		information in the	mid-sized
		2:9) and	is not permissible		annual accounts;	companies;
		accordingly void			furthermore, a	usually combined
		pursuant to s.			discharge does	with a clause
		3:40			not prevent	providing for
					individual	indemnification by
					shareholders from	the company
					instituting
					proceedings
Poland		Not permissible	1) Duty of non-		1) Duty of non-	- Generally
			competition, Art.		competition, Art.	permissible, but
			380: consent can		380: the consent	not often
			be given ex ante		of the supervisory	concluded in
			by the supervisory		board (see left)	practice
			board		may also be given	(insurance is
			2) Duty of care:		after the duty has	preferred)
					been breached
			acting on the			- D&O insurance
			basis of a		2) Other duties:	available and
			resolution by the		a) The company	fairly common in
			GM does not			larger companies,
					and the director
			exclude liability,			but not so much in
					may enter into an
			because the GM			small and
					agreement
			cannot give the			medium-sized
					releasing the
			board binding			enterprises
					director from
			instructions with
					liability, Art. 508
			respect to the
					Civil Code
			management of
					b) Settlement is
			the affairs of the
					possible: the
			company
					company is
					represented by
					the supervisory
					board, the GM
					must give its
					consent (Art.
					395(3), discharge
					of duties)
					c) The GM can
					issue a resolution
					releasing the
					director from
					liability, provided
					that the GM was
					fully informed
					NOTE: waiver or
					discharge by the
					GM cannot be
					used as a defence
					in a derivative
					action or in
					bankruptcy, Art.
					487
			179	Directors’ Duties and Liability in the EU

					3) Directors as
					shareholders shall
					not participate in a
					resolution
					regarding their
					liability, Art. 413
Portugal		- Not permissible,	No liability if the		- Art. 74(2): waiver	- In principle, the
		Art. 74(1)	act is based on a		is only possible by	general prohibition
		- Some	resolution by the		express resolution	of provisions
			shareholders, Art.		of the	exempting or
		commentators
			72(5). According		shareholders and	limiting the
		argue that it is
			to the legal		no objection by a	directors’ liability
		possible to
			literature, the		minority of at least	also extends to
		exclude directors’
			provision has to		10%; the	any indemnity
		liability for
			be interpreted		conflicted director	arrangements, i.e.
		negligence; only
			restrictively.		must abstain from	provisions of the
		gross negligence
			Decisions based		voting as	articles of
		or intent could not
			on false		shareholder	association by
		be excluded
			information do not			which, directly or
					- Art. 74(3): The
			exculpate the			indirectly, the
					resolution adopted
			directors. If the			company
					by the general
			decision is			assumes the
					meeting to
			voidable and the			financial costs of
					approve the
			directors			the liability of its
					accounts shall not
			understand that			own directors
					imply a waiver of
			the potential loss
					the company’s	- D&O insurance
			of carrying out the
					claims, unless the	available and
			resolution is
					facts that	relatively common
			relevant, they may
					establish the
			be liable if they
					liability were
			execute it.
					specifically made
					known to the
					shareholders and
					no 10% minority
					objects
Romania		Permissible,	- It is unclear		Ratification of the	- The articles of
		except for	whether the		duty of care is	incorporation or
		violations of the	shareholders can		permissible as	the agreement
		duty to act in	authorise a		long as long as	with the director
		good-faith and for	related-party		the breach is	may provide that
		intentional	transaction. It may		generated by	the company shall
		misconduct or	be argued that a		culpa levis only;	indemnify the
		gross negligence	transaction that is		no ratification of	director for the
			contrary to the		breaches of the	costs of defending
			company’s		duty of loyalty	against a liability
			interests is void			claim.
			and can neither			- D&O insurance
			be authorised nor
						is available and
			ratified. In any
						mandatory for
			case, the
						joint stock
			conflicted director
						companies
			cannot vote on
			such a resolution
			(Art. 127).
			- Other ex ante
			authorisations of
			breaches of the
			180	Directors’ Duties and Liability in the EU