Liability of Executive Managers and Executive Board Members

Corporate decision-making demands sound judgment and, often, prompt and decisive action. Executive managers and executive board members are accountable for the company’s affairs and must carefully assess and manage their potential personal liability exposure. We advise corporate leaders on the legal duties and obligations arising from their roles, develop tailored strategies to mitigate liability risks, and provide legal representation in defending against claims brought against them.

Identifying liability risks early

Ambiguities in accountability, gaps in information, and inadequate documentation of key decisions can increase corporate leaders’ exposure to personal liability. We help you assess the legal duties and responsibilities associated with your role, evaluate the company’s organizational and governance frameworks, and address the legal implications of major business decisions. Particular attention is given to periods of financial distress, conflicts of interest, and transactions involving shareholders or other related parties.

Diligent preparation of corporate decisions

Well-drafted executive management contracts, clearly defined rules of procedure, and a transparent allocation of responsibilities are fundamental to effective corporate governance and accountable executive decision-making. We provide guidance on the systematic documentation of material corporate decisions, the implementation of appropriate oversight and reporting mechanisms, corporate compliance and the assessment of D&O’s liability insurance coverage.

Evaluating and defending against liability claims

When allegations of liability arise, we conduct a thorough assessment of the underlying facts, the rationale and documentation supporting the relevant decisions, and the allocation of responsibilities. On that basis, we work with you to develop a tailored legal strategy for pursuing or defending against the claims. A key consideration is whether commercial mediation offers a viable path to a resolution that aligns with the parties’ respective interests or whether litigation is the more appropriate course of action. The severity of the allegations, the available evidence, the urgency of the matter, anticipated legal costs, and the potential implications for the company and its reputation are considered. Legal representation is tailored to the scope of the engagement and the interests at stake.

Does an adverse business outcome automatically trigger personal liability?

No. An unfavorable business outcome, on its own, does not give rise to personal liability. Liability depends on the applicable legal duties and whether the relevant legal requirements are met. In evaluating corporate decisions, particular attention is given to the adequacy of the information available at the time the decision was made, the decision-making process, and whether the decision was guided by the company’s best interests.

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