A variety of fundamental changes has brought the topic of the liability of board members (also personal) into focus:
- Changed laws
- Changed verdicts
- Corporate Governance and compliance including all further developments
- Spectacular cases in the public domain (corruption, embezzlements, civil and penal charges)
- D & O insurances (see down below)
- Ex post (!) considerations for damage cases
- Business Judgement Rule (see down below)
- Economic and corruption prosecution
- Balance sheet investigators (2013; association; misplacement; bad PR)
- Whistle blower page of the public domain (www.whistleblowing.at)
Ad Business Judgement Rule
It originates in Anglo-Saxon law, and is in German corporate law part of the executive´s liability, according to which the chairman or the board members are personally liable and sueable for indemnities for committed violations of duty. Though there is no personal liability for a manager or supervisor, if adequate entrepreneurial information and the decisions were made for the good of the company. In Austria, the thought of a liability free margin for decision makers (safe harbour), is under discussion.
Ad D & O: Directors and Officers, Pension Trustee Liability
To face the liabilities of a board brings the possibility of Pension Trustee Liability insurance into play. This insurance covers the board and its members from indemnities resulting from negligence and gross negligence to the company and/or third parties. It secures the private fortunes of the involved officials and serves as a balance protection for the company by deploying financial resources in case of an utilisation of the concerned officials.