Legal Liability of Directors and Company Officials Part 1: Substantive Grounds for Liability

Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Mathias Siems, Linia Prava

Publikation: Working/Discussion PaperWorking Paper/Preprint


This Article is an excerpt from a World Bank-sponsored Report, prepared in December 2006, to the Russian Federal Service on the Securities Market. We discuss the liability under company law of directors, senior company officials, and controlling shareholders of public companies in Canada, France, Germany, Korea, Russia, the United Kingdom, and the United States (with a more limited look at Austria, the European Union, Italy, Japan, and Latvia), and recommend amendments to Russian Company Law. We propose measures to define the concepts of good faith and conflict of interest; establish duties of disclosure and confidentiality, extend duties under company law to controlling shareholders and de facto directors for conflict of interest transactions; and protect directors against liability for business decisions adopted without a conflict of interest. It includes an Introduction by Prof. Black which provides an overview of Russia's progress in creating a modern company law.

A related Article, also excerpted from this Report, addresses procedural rules for shareholder lawsuits and administrative and criminal liability of directors and company officials. See Legal Liability of Directors and Company Officials Part 2: Court Procedures, Indemnification and Insurance, and Administrative and Criminal Liability (Report to the Russian Securities Agency), COLUM. BUS. L. REV. (forthcoming 2008), available at

The full Report is available at (English version) and (Russian version). It also addresses duties of directors for a company in financial distress, duties of a managing organization, the role of labor law in governing the relationship between a company and its directors and officials, whether this relationship is contractual or legal in nature, and differences between public and nonpublic companies.
PublikationsstatusVeröffentlicht - 1 Apr. 2007


ReiheUniversity of Texas Law and Economics Research Paper

Österreichische Systematik der Wissenschaftszweige (ÖFOS)

  • 505044 Gesellschaftsrecht
  • 505017 Rechtsvergleichung