Original scientific paper
https://doi.org/10.3935/zpfz.72.12.01
Liability of Supervisory Board Members for Damages to the Public Limited Company
Jakša Barbić
; Croatian Academy of Sciences and Arts, Zagreb, Croatia
Abstract
The paper systematically elaborates on the liability of supervisory board members. Although the supervisory board members do not manage the business of the company, their role is important because they make sure that the company’s business is conducted in a way that is acceptable to all stakeholders of the company. At the same time, their responsibility is based on the same principle as the responsibility of the members of the management board who manage the company's business activities. Such responsibility stems from their fundamental obligation to undertake all their activities in the company’s interest. Foremost, the paper analyses the standard of care required from the supervisory board members in performance of their duties, with special reference to the role of supervisory board members in the parent company and in the supervisory boards of subsidiaries in the concern. Subsequently, the paper analyses the effects of business judgment rule application which protects the free entrepreneurial judgment of the supervisory board members. This is followed by analysis of issues relating to the conflict of interest of the supervisory board members and the breach of the trade secret. Afterwards, the paper deals more elaborately with the request for compensation of damages to the supervisory board members. More precisely, the paper analyses issues relating to the question against which supervisory board member can such request be made, conditions for establishing their liability for damages and enforcement of such request. Paper also analyses issues pertaining to the company’s waiver of that request as well as the possibility of concluding a settlement between the company and the supervisory board member. Ultimately, the responsibility for the exploitation of influence in the company is elaborated upon.
Keywords
public limited company; supervisory board; liability of the supervisory board members; business judgment rule
Hrčak ID:
280127
URI
Publication date:
1.6.2022.
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