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Part Ⅰ. Africa1

Chapter 1 South Africa&Eric Levenstein, David Gewer, David Walker and Patrick Mayer3

Part Ⅱ. America17

Chapter 2 Argentina&Javier M. Petrantonio and Laura Lavia Haidempergher19

Chapter 3 Bermuda&Peter Bubenzer and John Riihiluoma37

Chapter 4 Brazil&Walter Douglas Stuber49

Chapter 5 Canada&Markus Koehnen and Erin Cowling61

Chapter 6 Cayman Islands&Antony Duckworth, Alan de Saram and Wendy Stenning73

Chapter 7 Chile&Jaime Carey and Cristidn Eyzaguirre81

Chapter 8 Mexico&Daniel De/Rio and Juan Jose Lopez-de-Silanes93

Chapter 9 United States of America&Robert Ripin and Christopher Winckler105

Part Ⅲ. Asia119

Chapter 10 Hong Kong&Allan Leung and Danny Leung121

Chapter 11 India&Sore Mandal135

Chapter 12 Israel&Rachel Levitan and Yael Navon147

Chapter 13 Japan&Norio Mitsuuchi165

Chapter 14 Mongolia&Michael Aldrich, Byambaa Batbayar and Dashnyam Zoljargal175

Chapter 15 The People's Republic of China&Michael Aldrich and Ke Chen185

Chapter 16 The Russian Federation&Oxana Balayan197

Chapter 17 Singapore&Andrew M. Lira209

Chapter 18 Turkey&Serdar Paksoy223

Chapter 19 United Arab Emirates&Imtiaz Shah and Charlotte Douglass235

Chapter 20 Vietnam&Christian Schaefer and Phong Nguyen249

Part Ⅳ. Australia and New Zealand261

Chapter 21 Australia&Fred Chilton and Michael Scarf263

Chapter 22 New Zealand&Jeremy Steel, Mark Williamson and Jess Hogan277

Part Ⅴ. Europe291

Chapter 23 The European Action Plan&Thorsten M. Volz293

Chapter 24 Austria&Christian Dorda303

Chapter 25 Belgium&Roel Nieuwdorp and Jens Van Hecke315

Chapter 26 Czech Republic&Dagmar Dubecka and Martin Solc331

Chapter 27 Denmark&Jφrgen Boe and Mads Poulsen341

Chapter 28 Finland&Kari Lautjarvi and Riikka Leinonen355

Chapter 29 France&Jacques Buhart365

Chapter 30 Germany&Alexander Loos379

Chapter 31 Ireland&Michael Greene and David Dobbyn389

Chapter 32 Italy&Guido Brosio and Gabriele Fagnano409

Chapter 33 Lnxembourg&Guy Harles and Saskia Konsbruck421

Chapter 34 The Netherlands&Willem Calkoen and Martin Grablowitz437

Chapter 35 Poland&Tomasz Zak449

Chapter 36 Portugal&Miguel de Avillez Pereira and Bruno Sampaio Santos461

Chapter 37 Spain&Enric Picanyol, Coro Fernandez-Ramada and Idoya Fernandez473

Chapter 38 Sweden&Per Berglof ad Sverker Bonde487

Chapter 39 Switzerland&Matthew T. Reiter and Felix R. Ehrat499

Chapter 40 Ukraine&Timur Bondaryev and Pavlo Khodakovsky513

Chapter 41 United Kingdom&Karla Dudek527

Subject Index541

About the Editor and the Authors1

Preface1

Index of Countries1

Index of Abbreviations (Country - Abbreviation)1

Index of Abbreviations (Abbreviation - Country)1

Part Ⅰ. Africa1

Chapter 1 South Africa&Eric Levenstein, David Gewer, David Walker and Patrick Mayer3

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities3

Ⅱ. Recent Cases Dealing with Directors' Liability5

Ⅲ. Socio-Anthropological Issues7

Ⅳ. Corporate Governance7

Ⅴ. Liability Issues9

A. The Act9

B. The New Companies Act10

Ⅵ. Indemnification, Directors' and Officers' Insurance, Other Methods of Protection13

A. The Act13

B. The New Companies Act14

Ⅶ. Lawyer Directorship14

Ⅷ. The 'European Action Plan'15

Part Ⅱ. America17

Chapter 2 Argentina&Javier M. Petrantonio and Laura Lavia Haidempergher19

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities19

A. Corporations Legal System in Argentina19

B. Board's Authority and Structure19

1. Rules; Meetings20

2. Duties of the Board20

3. Composition of the Board21

4. Directors' Compensation22

C. Directors' Appointment and Conditions23

1. Election of Directors23

2. Individuals Precluded to Be Appointed as Directors23

D. Delegation24

E. Removal of Directors24

Ⅱ. Recent Cases Dealing with Directors' Liabilities25

A. Nature of Directors' Liability25

B. Directors' Liability and Economic Situation25

C. Cases Related to the Administration of the Company26

D. Delegation and Activities in Competition with the Company26

Ⅲ. Judicial Review (Tightening of Standards?)27

A. Directors' Liability Stems from the Sole Fact of Being a Board Member27

B. Standard of Diligence27

C. Damages to the Company and Liability: General Conditions29

D. Judicial Procedure29

Ⅲ. Corporate Governance30

Ⅴ. Liability Issues31

A. The Responsibility Actions Ruled by the Companies Act31

1. Corporate Liability Action Filed by the Company ('Acci6n de Responsabilidad Social')31

2. Corporate Liability Action Filed by Any Shareholder31

3. Individual Responsibility Action32

B. Limits (Caps) and Statutory Limitations32

C. Directors' Joint Liability33

D. Relevance of Bankruptcy with Regard to Bringing a Directors' Liability Action33

E. Costs and Fees in Liability Litigation34

Ⅵ. Indemnification34

Ⅶ. Directors' and Officers' Insurance34

Ⅷ. Lawyer Directorship35

Ⅸ. Forecast on Future Legislation Development35

Chapter 3 Bermuda&Peter Bubenzer and John Riihiluoma37

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities37

A. Role of Chairman and CEO38

B. Board Structures38

C. Directors' Election39

D. Delegation39

E. Removal of Directors40

Ⅱ. Recent Cases Dealing with Directors' Liability40

Ⅲ. Judicial Review41

Ⅳ. Typical Approach to Avoid Directors' Liability41

A. Composition of the Board41

1. Are the Decision-Making Mechanisms Changing?41

2. Board/Management Relationship41

Ⅴ. Corporate Governance42

Ⅵ. Liability Issues44

A. Who Can Sue?44

B. Who Could Be Sued?44

C. 'De Facto' Directors44

D. Thresholds and Caps on Liability44

E. Joint Liability/Solidarity45

F. Derivative Actions45

1. Class Actions46

2. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit46

3. Costs and Fees in Liability Litigation46

Ⅶ. Indemnification46

Ⅷ. Directors' and Officers' Insurance47

Ⅸ. Other Methods of Protection47

Ⅹ. Lawyer Directorships47

Ⅺ. Forecast on Future Legislation Development47

Chapter 4 Brazil&Walter Douglas Stuber49

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities49

A. Overview49

B. Limitada49

C. Sociedade Por Acoes ('SA')51

Ⅱ. Recent Cases Dealing with Directors' Liability53

Ⅲ. Judicial Review (Tightening of Standards)53

Ⅳ. Typical Schemes/Behaviour to Avoid Directors' Liability54

Ⅴ. Corporate Governance54

Ⅵ. Liability Issues56

A. Who Can Sue?56

B. Who Can Be Sued?56

C. 'De Facto' Director57

D. Thresholds and Limitations/Caps of Liabilities57

E. Joint Liability/Solidarity57

F. Derivative Actions58

G. Class Actions58

H. Relevance of Bankruptcv of Corooration58

Ⅶ. Indemnification59

Ⅷ. Directors' and Officers' Insurance59

Ⅷ. Other Methods of Protection60

Ⅹ. Lawyer Directorship60

Ⅺ. Forecast on Future Legislation Development60

Chapter 5 Canada&Markus Koehnen and Erin Cowling61

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities61

A. Two-Tier or Unitary Company Structure61

B. Chairman/CEO62

C. Board Structures62

D. Elections/Staggering62

E. Delegation62

F. Removal of Directors63

Ⅱ. Recent Cases Dealing with Directors' Liability64

Ⅲ. Judicial Review (Tightening of Standards?)65

A. The Shift from Result to Process65

B. The Shift from a Subjective to an Objective Standard of Care66

Ⅳ. 'Socio-Anthropological Issues'66

A. Is the Composition of Boards Changing in Light of Recent Developments?66

B. Are Decision-Making Mechanisms Changing in Light of Recent Developments?66

C. Relationship between Board and Management67

Ⅴ. Corporate Governance67

A. Board Procedures67

B. Structures of Oversight68

Ⅵ. Liability Issues69

A. Who Can Sue?69

B. Who Can Be Sued?69

C. Thresholds and Limitations/Caps of Liabilities69

D. Joint Liability70

E. Derivative Actions70

F. Class Actions70

G. Relevance of Bankruptcy70

H. Costs and Fees in Liability Litigation71

Ⅶ. Indemnification71

Ⅷ. Directors' and Officers' Insurance71

Ⅸ. Other Methods of Protection71

Ⅹ. Lawyer Directorship72

Chapter 6 Cayman Islands&Antony Duckworth, Alan de Saram and Wendy Stenning73

Ⅰ. Introduction73

Ⅱ. Board Structure74

A. Appointment of Directors74

B. Delegation74

C. Removal of Directors75

Ⅲ. Duties of Directors75

A. General Duties of Directors75

B. Duty of Honesty and Good Faith76

C. Duties of Care and Skill77

Ⅳ. Liability Issues77

A. General Points77

B. What Can Be Recovered?78

C. Costs78

Ⅴ. Indemnification of Directors78

Ⅵ. Directors' Reliance on outside Professionals and Professionally Qualified Directors78

Ⅶ. Winding Up79

Chapter 7 Chile&Jaime Carey and Cristian Eyzaguirre81

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities81

A. The Board of Directors82

B. Composition of the Board82

C. Powers of the Board and How They Are Used83

D. Independent Directors and Audit Committee84

E. Executive Officers85

Ⅱ. Duties of Directors85

A. Duty of Care85

B. Duty of Loyalty86

C. Duty of Disclosure87

Ⅲ. Liability of Directors88

Ⅳ. Directors' Insurance89

Ⅴ. Actions to Pursue Redress of the Company89

Ⅵ. Conclusion90

Chapter 8 Mexico&Daniel Del Rio and Juan Jose Lopez-de-Silanes93

Ⅰ. Introduction93

A. Investment Promotion Companies ('Sociedades Anonimas Promotoras de Inversi6n ')93

B. Stock Exchange Investment Promotion Companies ('Sociedades An6nimas Promotoras de Inversi6n Bursatil')94

C. Stock Exchange Companies ('Sociedades Anonimas Bursatiles ')94

Ⅱ. 'National Basics' and National Legal Theories of Directors' Liabilities95

A. Two-Tier System or One-Tier System95

B. Chairman and CEO (One or Two People/Checks and Balances)96

C. Board Structures96

D. Elections/Staggering96

E. Delegation97

F. Removal of Directors97

Ⅲ. Judicial Review (E.g., Tightening of Standards?)98

Ⅳ. 'Socio-Anthropological Issues'98

A. Is the Composition of the Board of Directors Changing in Mexico in Light of Recent Developments?98

B. Are the Decision-Making Mechanisms Changing in Mexico in Light of Recent Developments?98

C. Board/Management Relationship98

Ⅴ. Corporate Governance99

A. Board Procedures99

B. Structures of Oversight99

Ⅵ. Liability Issues100

A. Who Can Sue?100

B. Who Can Be Sued?101

C. Thresholds and Limitations/Caps of Liabilities in Mexico (Statutory Limitations on Directors' Liability)101

D. Joint Liability/Solidarity101

E. Derivative Actions102

F. Class Actions102

G. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit102

H. Costs and Fees in Liability Litigation102

Ⅶ. Indemnification103

Ⅷ. Directors' and Officers' Insurance103

Ⅸ. Other Methods of Protection103

Ⅹ. Lawyer Directorship104

Ⅺ. The 'European Action Plan'104

Chapter 9 United States of America&Robert Ripin and Christopher Winckler105

Ⅰ. National Framework for US Corporate Boards105

A. Regulatory Structure105

B. Board Composition106

1. Board and Corporate Structure106

2. Number of Directors106

3. Age and Nationality Restrictions106

4. Independence106

C. Multiple Roles106

D. Board Procedures107

E. Board Elections107

1. Classified Boards107

2. Cumulative Voting107

3. Staggered Board107

4. Weighted Voting108

F. Delegation108

G. Removal of Directors108

Ⅱ. Standards Applicable to Directors108

A. General Duties108

B. State Statute, Securities Exchange, and Common Law Duties109

1. Duty of Care109

2. Duty of Loyalty109

3. Business Judgment Rule109

Ⅲ. Recent Cases Dealing with Directors' Liabilities109

A. Citigroup/AIG/Krasner109

B. WorldCom/Enron/Emerging Communications110

C. Disney/Van Gorkom111

D. Are Decision-Making Mechanisms Changing?111

Ⅳ. Corporate Governance112

A. Regulation112

B. Sarbanes-Oxley Act113

C. Board Composition/Independence113

1. Independence of Majority of Board Members113

2. Application to Foreign Private Issuers113

3. Corporate Governance Guidelines/Code of Ethics114

D. State Law Requirements (Delaware)114

V. Liability Issues114

A. Who Can Sue?114

1. Shareholder Derivative Lawsuit114

2. Creditors' Rights115

3. Regulator Actions115

B. Grounds for Liability115

1. Criminal and Civil Liability115

2. Securities Law115

3. Antitrust116

4. Theft and Fraud116

5. Other116

C. Thresholds and Limitations/Caps of Liabilities116

D. Shareholder Liability116

Ⅵ. Indemnification117

Ⅶ. Insurance117

Part Ⅲ. Asia119

Chapter 10 Hong Kong&Allan Leung and Danny Leung121

Ⅰ. Introduction121

A. One-System Body121

B. Board Structure and Duality of Chairman and CEO122

1. Board Structure122

2. Duality of Chairman and CEO122

C. Delegation123

D. Elections123

E. Removal of Directors123

Ⅱ. Liability Issues123

A. Directors' Duties123

1. Fiduciary Duties124

a. Duty to Act in Good Faith in the Best Interests of the Company as a Whole124

b. No Fetters on Discretion124

c. Duty Not to Compete124

d. Duty to Avoid a Conflict of Interest and Not to Make a Secret Profit124

e. Confidentiality125

2. General Duties125

a. Skill, Care, and Diligence125

b. Duty Not to Exceed Powers126

c. Duty to Creditors126

B. Who Can Sue?126

1. Duties Owed to Individual Shareholder126

2. Duties Owed to Creditors127

C. Who Can Be Sued?127

D. Derivative Actions127

1. Common Law Derivative Action127

2. Statutory Derivative Action128

E. Unfair Prejudice128

F. Representative Actions129

G. Insolvency Context129

1. Misfeasance129

2. Fraudulent Trading130

3. Disqualification Order130

H. Costs and Fees in Liability Litigations130

Ⅲ. Indemnification130

Ⅳ. Protection against Wrongs of Directors131

A. Ratification131

B. Directors' and Officers' Liability Insurance131

V. Corporate Governance131

A. Existing Corporate Governance131

B. Corporate Governance Reform: Difficulties in Hong Kong132

1. Family-Controlled Companies132

2. Quality of INEDs132

C. Going Forward133

Chapter 11 India&Som Mandal135

Ⅰ. Introduction135

A. Appointment of Directors135

B. Shareholder Rights136

C. Government's Right to Appoint Directors136

D. Removal of Directors136

E. Power of Directors May Be Amended137

Ⅱ. Recent Cases and Anthropological Approach to Directors' Liabilities137

A. Financial Scams138

B. Judiciary139

Ⅲ. Government's Approach towards Ensuring Greater Corporate Accountability139

Ⅳ. Liability Issues142

A. Officer in Default143

B. Contractual Liabilities143

C. Tortious Liability144

D. Apprehension of Prosecution144

E. Compounding Offences, a Way Out?144

F. Managing Director/Whole-Time Director/ Nominee Director/Professional Director145

G. Object and Scope of Section 633145

H. Directors' Liability Insurance145

Chapter 12 Israel&Rachel Levitan and Yael Navon147

Ⅰ. National Basis: The Companies Law 1999147

A. History of the Current Company Law147

B. The Board's Role as a Gatekeeper148

C. The Structure of the Controlling Powers of a Company148

1. The General Assembly of Shareholders148

2. The Board of Directors149

3. Ancillary Articles Relating to the Board's Activities149

4. Dismissal of a Director150

a. The Power to Dismiss a Director150

b. The Duty to Dismiss a Director150

c. An Outside Director Can Only Be Dismissed as Follows:150

5. The Chief Executive Officer150

Ⅱ. Main Aspects of the Law Relevant to Directors' and Officers' Liability151

A. Liability towards the Company151

1. Duty of Care151

2. Duty of Trust151

3. Directors with Special Expertise152

B. Directors' and Officers' Liability towards the Shareholders152

C. Directors' and Officers' Liability towards Third Parties153

D. Director and Officer Criminal Liability155

E. Liability under Specific Laws157

1. Liability According to the Securities Act of 1968157

2. Presumption Set in Various Laws Concerning Directors' and Officers' Liability157

Ⅲ. Claims against Directors and Officers: Procedural Aspects157

A. Procedure for Claiming157

1. Claim Filed by an Individual158

2. Derivative Action158

3. Class Action158

B. Claims Against Directors and Officers During Liquidation158

Ⅳ. Exemption, Indemnification, and Insurance160

A. General160

B. Exemption from Liability160

C. Indemnification160

D. Directors' and Officers' Liability Insurance161

E. Invalid Stipulations162

F. Special Approvals162

Chapter 13 Japan&Norio Mitsuuchi165

Ⅰ. Introduction165

Ⅱ. Basic Structures (to Have a Board or Not, Etc.)166

A. Overview166

B. KK without a Board166

C. KK with a Board166

D. KK with Committees166

Ⅲ. CEO, President, and Other Officers167

Ⅳ. Structures of Board and Committees167

Ⅴ. Elections167

Ⅵ. Delegation168

Ⅶ. Removal of Directors168

ⅤⅢ. Other Recent Changes168

A. Outside Director168

B. Decision-Making Mechanism168

Ⅸ. Judicial Review169

A. Relationship between KK and Directors/Executive Officers169

B. Business Judgment Rule169

X. Corporate Governance169

A. Convocation of the Board169

B. Resolutions170

C. Structure of Oversight170

Ⅺ. Liability Issues170

A. Who Can Sue?170

1. Company170

2. Shareholder170

3. Third Party171

B. Who Can Be Sued?171

C. Thresholds and Limitation of Liabilities171

1. Negligence Requirement171

2. Exemption from Liabilities172

3. Partial Exemption from Liabilities172

4. Prior Agreement to Limit Liabilities172

D. Relevance of Bankruptcy of a KK with Regard to Bringing a Directors' Liability Suit172

E. Costs and Fees in Liability Litigations172

F. Insurance173

G. Other Methods of Protection173

H. Lawyer Directorship173

Ⅻ. Conclusion173

Chapter 14 Mongolia&Michael Aldrich, Byambaa Batbayar and Dashnyam Zoljargal175

Ⅰ.　Introduction: General Principles of Mongolian Corporate Law175

A. The Company Law of Mongolia176

B. Three-Tiered Body for Corporate Governance176

C. Executive Administration178

D. Board Composition179

E. Delegation179

F. Directors' Elections179

G. Chairman of the Board179

H. Directors' Term of Appointment180

I. Board Meetings180

J. Removal of Directors180

Ⅱ. Recent Cases Dealing with Directors' Liability: Anod Bank180

Ⅲ. Judicial Review181

Ⅳ. Corporate Governance181

Ⅴ. Liability Issues182

A. Who Can Be Sued?182

B. Who Can Sue?183

C. Thresholds and Limitations/Caps of Liabilities183

D. Joint and Several Liability183

E. Derivative Actions183

F. Class Actions183

Ⅵ. Directors' and Officers' Insurance184

Ⅶ. Lawyer Directorship184

ⅤⅢ. Forecast on Future Legislation Development184

Chapter 15 The People's Republic of China&Michael Aldrich and Ke Chen185

Ⅰ. Introduction185

A. Three-Tiered Corporate Governance Body186

1. Shareholders186

2. Board of Directors or Executive Director186

3. Board of Supervisors187

B. Board Structure and Concurrent Offices187

1. Board Structure187

2. Concurrent Office188

C. Delegation188

D. Elections188

E. Removal of Directors188

F. Qualification of Directors188

Ⅱ. Liability Issues189

A. Directors' Duties189

1. Fiduciary Duty189

2. General Duties189

3. Legal Representative190

4. Apparent Authority190

B. Who Can Sue?191

1. Duties Owed to the Company191

2. Duties Owed to Shareholders191

3. Duties Owed to Creditors191

C. Who Can Be Sued?192

D. Derivative Actions by Shareholders192

E. Unfair Prejudice192

1. Compulsory Buy Back192

2. Compulsory Winding Up193

F. Representative Actions193

G. Insolvency Context193

H. Costs and Fees in Liability Litigations193

Ⅲ. Indemnification194

Ⅳ. Protection against Wrongs of Directors194

A. Ratification194

B. Directors' and Officers' Liability Insurance194

V. Corporate Governance194

Chapter 16 The Russian Federation&Oxana Balayan197

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities197

A. Two-Tier or Unitary Company Structure197

B. Chairman/CEO198

C. Board Structures198

D. Directors' Elections/Staggering198

E. Directors' Term of Appointment199

F. Delegation199

G. Removal of Directors199

Ⅱ. Recent Cases Dealing with Directors' Liability200

Ⅲ. Judicial Review (Tightening of Standards?)200

Ⅳ. Typical Schemes/Behaviour to Avoid Director's Liability200

V. Corporate Governance201

A. Difference between JSCs and LLCs201

B. Corporate Governance Code201

Ⅵ. Liability Issues201

A. Who Can Sue?201

1. The Company201

2. The Shareholder202

3. Creditors and Third Parties203

4. The Government203

B. Who Can Be Sued?204

C. 'De Facto' Director204

D. Thresholds and Limitations/Caps of Liabilities204

E. Joint Liability/Solidarity204

F. Derivative Actions205

G. Class Actions205

H. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit205

Ⅶ. Indemnification206

ⅤⅢ. Directors' and Officers' Insurance206

Ⅸ. Lawyer Directorship207

Ⅹ. Forecast on Future Legislation Development207

Chapter 17 Singapore&Andrew M. Lim209

I. 'National Basics' and National Legal Theories of Directors' Liabilities209

A. Directors' Liabilities in General209

B. Board Structures211

1. Code of Corporate Governance211

2. Chairman and CEO211

3. Board Composition and Guidance211

C. Elections and Appointment212

D. Delegation212

E. Removal of Directors212

Ⅱ. Cases Dealing with Directors' Liability213

A. Lim Weng Kee v. Public Prosecutor213

B. Vita Health Laboratories Pte Ltd & Ors v. Pang Seng Meng213

C. W&P Piling Pte Ltd (in liquidation) v. Chew Yin What & Ors214

D. Public Prosecutor v. Lee Thian Soon and Other Decisions214

E. Public Prosecutor v. Ong Chow Hong214

Ⅲ. Recent Developments215

A. Corporate Governance Council215

B. Audit Committee Guidance Committee215

C. Legislative Proposals216

D. Financial Services Industry216

Ⅳ. Corporate Governance217

A. Independent Directors217

B. Oversight Committees217

V. Liability Issues218

A. Who Can Sue?218

B. Who Can Be Sued?219

C. Thresholds and Limitations on Directors' Liabilities219

D. False Reports219

E. Joint/Several Liability220

F. Derivative Actions220

G. Oppression Actions220

H. Release of Directors' Duties220

Ⅵ. Indemnification and Insurance221

Chapter 18 Turkey&Serdar Paksoy223

Ⅰ. Introduction223

Ⅱ. Who Can Be Elected as Director?224

A. Becoming a Director224

1. Qualifictions of Directors224

2. Proposed Amendments224

Ⅲ. Composition of the Board225

Ⅳ. Fiduciary Duties of Directors225

Ⅴ. Liabilities of Directors226

A. Situations in which Directors Are Held Liable226

1. Incorrect Payments of the Shareholders for Their Capital Contributions227

2. Distributed Dividends That Do Not Reflect the Actual Situation227

3. Non-existing or Unduly Kept Corporate Books and Company Records227

4. Shareholders Resolutions That Are Not Implemented without a Just Cause227

5. Directors' Deliberate or Negligent Failure to Perform Other Duties Delegated by the TCC or the Articles of Association228

6. Failure to Appoint Capable Executives228

B. Negligence Principle228

C. Who Can Sue the Directors? 229

1. Company229

2. Shareholders229

3. Third-Party Claims229

D. Liability of Directors under the CML230

E. Liabilities of Directors Arising out of Extraordinary Transactions230

1. Capital Increases230

2. Issuing Bonds231

3. Liability in Case of Bankruptcy231

F. Liability of Directors under the Tax Laws231

G. Liability of Directors under Social Security Law231

H. Liability of Directors under the Banking Law232

I. Liability of Directors under Criminal Law232

Ⅵ. Defences of Directors232

Ⅶ. Ceasing to Be a Director232

Chapter 19 United Arab Emirates&Imtiaz Shah and Charlotte Douglass235

Ⅰ. UAE Legal Regime235

A. Introduction235

B. Free Zones236

C. Permitted Corporate Vehicles236

Ⅱ. 'National Basics' and National Legal Theories of Directors' Liabilities237

A. Company Structure237

B. Chairman and CEO238

C. Board Structures239

D. Directors' Elections239

E. Directors' Term of Appointment239

F. Delegation240

G. Removal of Directors240

Ⅲ. Corporate Governance240

A. Ministerial Decision No. 32/R of 2007241

B. Decision 518241

Ⅳ. Liability Issues243

A. General Concept243

1. General Liabilities: Onshore Companies243

2. Criminal/Other Liabilities: Onshore244

3. General Liabilities: DIFC Companies244

a. Loyalty245

b. Conflict of Interest245

c. No Secret Profits245

d. Confidentiality245

e. Care, Skill, and Diligence246

Ⅴ. Who Can Sue?246

Ⅵ. 'De Facto' Director246

Ⅶ. Thresholds and Limitations/Caps of Liabilities247

ⅤⅢ. Relevance of Bankruptcy of Corporation247

Ⅸ. Indemnification247

Ⅹ. D&O Insurance247

Ⅺ. Forecast on Future Legislation Development248

Chapter 20 Vietnam&Christian Schaefer and Phong Nguyen249

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities250

A. Legal Framework and the Enterprise Law250

B. Company Forms under the Enterprise Law and Two-Tiered or Unitary Company Structure250

1. Limited Liability Company250

2. Joint Stock Company252

C. Definition of 'Director'252

D. Chairman/CEO (General Director)252

E. Board Structures253

F. Directors' Elections/Staggering and Directors' Term of Appointment254

G. Delegation254

H. Removal of Directors255

Ⅱ. Recent Cases Dealing with Directors' Liability255

Ⅲ. Judicial Review (E.g., Tightening of Standards?)256

Ⅳ. Typical Schemes/Behaviour to Avoid Directors' Liability256

Ⅴ. Corporate Governance256

Ⅵ. Liability Issues257

A. Who Can Sue?257

B. Who Can Be Sued?258

C. 'De Facto' Director258

D. Thresholds and Limitations/Caps of Liabilities258

E. Joint Liability/Solidarity258

F. Derivative Actions259

G. Class Actions259

H. Significance of Bankruptcy of Corporation259

Ⅶ. Indemnification259

ⅤⅢ. D&O Insurance259

Ⅸ. Other Methods of Protection260

Ⅹ. Lawyer Directorship260

Ⅺ. Forecast on Future Legislation Development260

Part Ⅳ. Australia and New Zealand261

Chapter 21 Australia&Fred Chilton and Michael Scarf263

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities263

A. Two-Tiered or Unitary Company Structure263

B. Chairman and CEO (One or Two People/Checks and Balances) 264

C. Board Structures264

D. Elections/Staggering264

E. Delegation265

F. Removal of Directors265

Ⅱ. Recent Cases Dealing with Directors' Liability265

Ⅲ. Judicial Review (Tightening of Standards?)266

Ⅳ. 'Socio-Anthropological Issues'266

A. Is Board Composition Changing in Australia in Light of Recent Developments?266

B. Are the Decision-Making Mechanisms Changing in Australia in Light of Recent Developments?267

C. Board/Management Relationship267

V. Corporate Governance268

A. Board Procedures268

B. Structures of Oversight (Mechanisms, Etc.)268

Ⅵ. Liability Issues269

A. Who Can Sue?269

1. The Company and Individual Shareholders269

2. Australian Securities and Investments Commission269

3. Creditors269

B. Who Can Be Sued?269

C. On what Basis Can a Director Be Sued?270

D. Thresholds and Limitations/Caps of Liabilities in Australia (Statutory Limitations on Directors' Liability)270

1. Duty of Care and Diligence271

2. Duty to Prevent Insolvent Trading271

E. Joint Liability/Solidarity271

F. Derivative Actions272

G. Class Actions272

H. Bankruptcy and a Directors' Liability Suit273

I. Costs and Fees in Liability Litigation273

Ⅶ. Indemnification273

ⅤⅢ. Directors' and Officers' Insurance274

Ⅸ. Other Methods of Protection274

Ⅹ. Lawyer Directorship275

Chapter 22 New Zealand&Jeremy Steel, Mark Williamson and Jess Hogan277

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities277

A. 'One System' Approach277

B. Definition of 'Director'278

C. Separation of Chairman and CEO278

D. Board Structures278

E. Elections/Staggering279

F. Delegation279

G. Board Meetings280

H. Disclosure of Conflicts of Interest280

I. Removal of Directors280

Ⅱ. Judicial Review (Tightening of Standards?)280

Ⅲ. Corporate Governance281

A. Changes to Regulatory Regime281

1. NZX Corporate Governance Best Practice Code281

2. Securities Commission: Corporate Governance Principles282

B. Use of Board Committees282

C. Other Oversight Structures283

Ⅳ. Liability Issues283

A. Who Can Sue?284

1. The Company284

2. Shareholders284

3. Creditors284

4. Regulatory Bodies284

B. Who Can Be Sued?285

C. Statutory Limitations on Directors' Liability285

D. Joint Liability285

E. Derivative Actions285

F. Class Actions286

G. Relevance of Liquidation286

H. Costs in Liability Litigation286

Ⅴ.　Recent Cases Dealing with Directors' Liability286

A. Reckless Trading286

B. Directors' Duties287

C. Silent Directors288

D. Directors of Finance Companies288

E. Other Statutory Liability288

Ⅵ. Judicial Review288

Ⅶ. Indemnification and Insurance289

A. Indemnity289

B. Insurance289

ⅤⅢ. Forecast on Future Legislation Development290

Ⅸ. Conclusion290

Part Ⅴ. Europe291

Chapter 23 The European Action Plan&Thorsten M. Volz293

Ⅰ. Introduction293

Ⅱ. The Scope of the European Action Plan294

Ⅲ. The Proposed Time Schedule of the European Action Plan295

Ⅳ. Provisions on Directors' Liability within the European Action Plan296

Ⅴ. The Implementation within the European Community297

Ⅵ. The Implementation within Member States' Legislation298

A. Austria298

B. Belgium298

C. Czech Republic299

D. Denmark299

E. Finland299

F. France299

G. Germany299

H. Ireland300

I. Italy300

J. Luxembourg300

K. Netherlands301

L. Poland301

M. Portugal301

N. Spain301

O. Sweden302

P. Switzerland302

Q. Ukraine302

R. United Kingdom302

Chapter 24 Austria&Christian Dorda303

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities303

A. Composition and Structure of Boards304

B. Appointment, Election, Delegation, and Removal of Directors304

C. General Principles of Directors' Liability305

1. Liability of Directors towards the Company305

2. Liability of Directors towards Third Parties305

Ⅱ. Recent Cases Dealing with Directors' Liability306

Ⅲ. Judicial Review: Tightening of Standards?307

Ⅳ. Typical Schemes to Avoid Directors' Liability307

A. Changing Composition of Boards307

B. Changing Decision-Making Mechanism308

C. Board/Management Relationship308

Ⅴ. Corporate Governance308

Ⅵ. Liability Issues309

A. Who Can Sue?309

1. The Company309

2. Shareholders310

3. Third Parties310

B. Who Can Be Sued?310

1. Directors310

2. The Company310

C. Thresholds and Limitations310

D. Joint Liability/Solidarity311

E. Derivative Actions311

F. Class Actions311

G. Relevance of Bankruptcy311

H. Costs and Fees in Liability Litigations312

Ⅶ. Indemnification312

ⅤⅢ. Directors' and Officers' Insurance312

Ⅸ. Other Methods of Protection312

Ⅹ. Lawyer Directorship313

Ⅺ. The 'European Action Plan'313

Chapter 25 Belgium&Roel Nieuwdorp and Jens Van Hecke315

Ⅰ. Introduction315

Ⅱ. 'National Basics' and National Legal Theories of Directors' Liabilities315

A. One- and Two-Tier Systems315

B. Board Structure316

C. Elections/Staggering316

D. Chairman and CEO317

E. Removal318

F. Representation of the Company318

G. Conflicts of Interest318

Ⅲ. Corporate Governance318

A. Duty of Care of the Director319

B. Enforceability319

Ⅳ. Liability Issues320

A. Introduction320

B. Civil Liability320

1. Contractual Liability320

a. Who Can Sue?320

b. When Can a Director Be Held Liable?321

Ⅰ. Fault321

Ⅱ. Damage321

Ⅲ. Causal Relation321

c. What Kind of Liability?321

2. Liability for Violations of the Articles and of the Company Code322

a. Who Can Sue?322

b. When Can a Director Be Held Liable?322

Ⅰ. Fault322

Ⅱ. Damage323

Ⅲ. Causal Relation323

c. What Kind of Liability?323

d. Specific Case: Bankruptcy323

e. Specific Case: Social Security Fraud324

f. Specific Case: Founders' Liability324

3. Tort Liability324

a. Who Can Sue?324

Ⅰ. Relation Director: Company324

Ⅱ. Relation Director: Third Parties325

b. When Can a Director Be Held Liable?325

c. What Kind of Liability?325

C. The Act of 3 July 1978 Concerning Employment Agreements325

Ⅴ. Judicial Review325

Ⅵ. Ways to Avoid or Limit Directors' Liability326

A. The Use of Legal Entities326

B. Whistleblowing326

C. Exoneration Clauses326

D. Hold Harmless Clauses327

E. Discharge327

1. Validity of the Discharge327

2. Scope of the Discharge328

3. Contractual Commitments to Grant Discharge328

F. Resignation328

G. Directors' Insurance328

H. Statute of Limitations328

Ⅵ. Lawyer Directorship329

Ⅶ. Forecast on Future Legislation329

Chapter 26 Czech Republic&Dagmar Dubeckd and Martin Solc331

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities331

A. Basic Powers of the Statutory Bodies332

1. Board of Directors332

2. Supervisory Board333

B. Composition of Company Bodies, Membership, and Requirements for the Performance Office333

1. Composition of Company Bodies333

2. Election and Removal, Membership Requirements334

C. Decision Making by Statutory Bodies, Prohibition of Parallel Functions, Ban on Competition, Restrictions on Parallel Employment335

1. Decision Making by Company Bodies335

2. Parallel Performance of Functions and Ban on Competition335

3. Relations between a Member of the Board of Directors and the Company under Labour Law335

4. Remuneration336

Ⅱ. Liability Issues336

A. Basic Obligations, Consequences of Breach, Burden of Proof336

B. Persons Authorized to Claim Compensation for Damage and Limitation Periods337

C. Basic Criminal Law Aspects338

D. Liability of Other Persons with Influence on the Acts of the Company338

1. Brief Introduction to the Law on Corporate Groups338

2. Liability of Statutory Bodies to the Controlling Entity339

3. Liability of Other Persons with Influence on Management of the Company339

a. Protection for Members of Statutory Bodies339

b. The National Climate340

Chapter 27 Denmark&Jφrgen Boe and Macls Poulsen341

Ⅰ. The Danish Management System341

A. General341

B. Election of Directors and Managers342

C. The Division of Power342

Ⅱ. Directors' Liability343

A. Legal Prerequisites to Liability343

B. Tasks and Duties344

C. Directors in Listed Companies345

Ⅲ. Recent Cases Dealing with Directors' Liability346

A. Introduction346

B. Liability for Violation of the Companies Act346

C. Liability for Predecessors' or Successors' Acts347

D. Liability for Violating the Financial Statements Act348

E. Duties in Pursuance of Special Legislation348

F. Operation of a Company in Difficulties349

Ⅳ. Developments in the Liability of Directors350

Ⅴ. Corporate Governance350

Ⅵ. Limitation of Liability351

A. Introduction351

B. Agreed Exemption From Liability351

C. Discharge from Liability: Adoption of Accounts351

D. Reduction of Liability351

Ⅶ. Insurance352

A. Common Directors' and Officers' Liability Insurance352

B. Lawyers' Liability Insurance352

C. Effect of Insurance Coverage352

Chapter 28 Finland*Kari Lautjarvi and Riikka Leinonen355

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities355

A. Company Organs356

B. Board of Directors357

1. Number of Board Members, Their Election, and Term of Duty357

2. Duties of Board Members under the Companies Act358

3. Finnish Corporate Governance Code and Finnish Panel on Takeovers and Mergers359

Ⅱ. Liability of Board Members360

A. Liability under the Companies Act360

B. Damage, Negligence, and Causality361

C. Scope of Liability361

D. Amount of Compensation and Legal Costs362

Ⅲ. Division of Liability362

A. Delegation362

B. Adjustment and Allocation of Damages363

Ⅳ. Limitation of Liability363

Chapter 29 France&Jacques Buhart365

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities365

A. Two-Tiered or Unitary Company Structure365

B. Chairman and CEO (One or Two People/Checks and Balances)366

1. Unitary Structure366

2. Two-Tiered Structure366

C. Board Structures366

1. Unitary Structure366

2. Two-Tiered Structure366

D. Director's Elections/Staggering367

1. Unitary Structure367

2. Two-Tiered Structure367

E. Directors' Term of Appointment367

1. Unitary Structure367

2. Two-Tiered Structure367

F. Delegation367

G. Removal of Directors368

1. Unitary Structure368

2. Two-Tiered Structure368

Ⅱ. Recent Cases Dealing with Director's Liability368

Ⅲ. Judicial Review (Tightening of Standards?) 368

Ⅳ. 'Socio-Anthropological Issues'369

A. Is the Composition of the Board of Directors Changing in France in Light of Recent Developments?369

B. Are the Decision-Making Mechanisms Changing in France in Light of Recent Developments?369

C. Board/Management Relationship369

1. Unitary Structure369

2. Two-Tiered Structure370

Ⅴ. Corporate Governance370

A. Board Procedure370

B. Structures of Oversight370

Ⅵ. Liability Issues371

A. Who Can Sue?371

1. Shareholders371

2. The Company Itself371

3. Third Parties372

B. Who Can Be Sued?372

1. Directors372

a. Directors' Civil Liability372

b. Directors' Criminal Liability372

2. Supervisory Board Members373

C. 'De Facto' Director373

D. Thresholds and Limitations/Caps of Liabilities/Caps of Liabilities in France (Statutory Limitations on Directors' Liability)373

E. Joint Liability/Solidarity374

F. Derivative Actions374

G. Class Actions374

H. Relevance of Bankruptcy of Corporation with Regard to Bringing A Directors' Liability Suit374

1. Directors' Liability374

a. Directors' Civil Liability375

b. Directors' Criminal Liability375

c. Extension of Bankruptcy Proceedings to Director375

2. Liability of Supervisory Board Members376

3. Costs and Fees in Liability Litigations376

Ⅶ. Indemnification376

ⅤⅢ. Directors' and Officers' Insurance376

Ⅸ. Other Methods of Protection376

Ⅹ. Lawyer Directorship377

A. French Lawyers May Not Directly Run a Company unless they Are Appointed in Companies Owned by their Own Families377

B. French Lawyers May Be Appointed as Director377

Ⅺ. The 'European Action Plan'377

Chapter 30 Germany&Alxander Loos379

Ⅰ. Basic Principals for Directors' Liability379

A. Single-Body Companies or Two-Tier System379

B. Management Structure and Chairman380

C. Delegation of Management Powers380

D. Removal of Directors381

Ⅱ. Typical Liability Cases381

A. Internal Liability towards the Company381

1. Violation of Non-compete381

2. Poaching of Business from the Company382

3. Disbursements from Restricted Equity of the Company382

4. Violation of Arm's Length Principles383

5. Knowing Disregard of Avoidable Risk383

B. External Directors' Liability383

1. Gross Negligence to Pay Taxes and Public Levies384

2. Illicit Non-payment of Social Security Contributions384

3. Late Filing for Insolvency384

Ⅲ. Liability Issues385

A. Enforcement of Director's Liability385

1. Who Can Sue?385

2. Costs of Litigation and Class Actions386

B. Joint Liability of Directors387

C. Indemnification387

Ⅳ. Directors' and Officers' Insurance387

Ⅴ. Lawyer Directorships388

Ⅵ. The European Action Plan388

Chapter 31 Ireland&ichael Greene and David Dobbyn389

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liability390

A. Board Structures390

B. Chairman and CEO391

C. Composition of the Board392

D. Election and Term of Appointment393

E. Delegation393

F. Removal of Directors394

Ⅱ. Recent Cases Dealing with Directors' Liability395

A. Responsibilities under Environmental Law395

B. Non-executive Directors396

Ⅲ. Corporate Governance397

A. Combined Code397

B. Directors' Compliance Statements398

Ⅳ. Liability Issues for Directors400

A. Who Can Sue?400

1. Public Authorities400

2. The Company400

3. Shareholders and Employees400

4. Creditors401

5. Third Parties401

B. Who Can Be Sued?401

1. Executive and Non-executive Directors401

2. Shadow Directors402

C. 'De Facto' Director402

D. Penalties402

E. Impact of Insolvency403

Ⅴ. Indemnification404

Ⅵ. Directors' and Officers' Insurance404

Ⅶ. Other Methods of Protection405

ⅤⅢ. Lawyer Directorships405

Ⅸ. Forecast on Future Legislation Development406

Chapter 32 Italy&Guido Brosio and Gabriele Fagnano409

Ⅰ. Corporate Governance Structure and Directors' Liability409

A. Traditional, Single-Body, and Two-Tier System; Structures of Internal Control409

B. Appointment and Removal of Directors410

C. Board Structure and Main Executive Roles411

D. Delegation and Information Flow within the Board of Directors412

E. Directors' Interests in Relation to Company Action413

Ⅱ. Directors' Duties and Recent Cases Dealing with Directors' Liability413

A. Directors' Duties413

B. Judicial Approach to Directors' Standard of Care and Diligence and Limits to Judicial Review of Directors' Business Errors: Tightening of Standards414

Ⅲ. Liability Issues416

A. Who Can Sue?416

1. Company Action against Directors and Relevant Indemnification416

2. Action of Company Creditors and Relevant Indemnification417

3. Action of Third Parties and Individual Shareholders, Relevant Indemnification417

B. Who Can Be Sued?418

C. Statute of Limitations and Other Limitations of Liability418

1. Statute of Limitations418

2. Other Limitations419

D. Joint and Several Liability419

E. Derivative Actions and Class Actions420

F. Relevance of Bankruptcy with Regard to Bringing a Directors' Liability Suit420

Chapter 33 Luxembourg&Guy Harles and Saskia Konsbruck421

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities421

A. 'One- or Two-Tiered System'421

B. Chairman and CEO422

C. Board Structures422

D. Elections/Staggering423

E. Delegation423

F. Removal of Directors424

Ⅱ. Recent Cases Dealing with Directors' Liability424

Ⅲ. Judicial Review (E.g., Tightening of Standards?)425

Ⅳ. 'Socio-Anthropological Issues'425

Ⅴ. Corporate Governance425

Ⅵ. Liability Issues426

A. Who Can Sue?426

1. Liability for Management Errors (Article 59, § 1 of the Law)427

2. Liability for Infringement of the Law or the Articles of Incorporation (Article 59,§2 of the Law)427

3. Liability in Tort427

4. Liability under Criminal Law427

B. Who Can Be Sued?428

1. Liability for Management Errors (Article 59,§1 of the Law)428

2. Liability for Infringement of the Law or the Articles of Incorporation (Article 59, §2 of the Law)429

3. Liability in Tort429

4. Liability under Criminal Law430

C. Thresholds and Limitations/Caps of Liabilities430

D. Joint Liability/Solidarity430

1. Liability for Management Errors (Article 59,§1 of the Law)430

2. Liability for Infringement of the Companies Law or the Articles of Incorporation (Article 59, § 2 of the Law)431

3. Liability in Tort431

4. Liability under Criminal Law431

E. Derivative Actions431

F. Class Actions432

G. Relevance of Bankruptcy of the Corporation with Regard to Bringing a Directors' Liability Suit432

H. Costs And Fees in Liability Litigations432

Ⅶ. Indemnification433

ⅤⅢ. Directors' and Officers' Insurance433

Ⅸ. Other Methods of Protection433

Ⅸ. Lawyer Directorship434

Ⅺ. The European Action Plan434

Chapter 34 The Netherlands&Willem Calkoen and Martin Grablowitz437

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities437

A. Two-Tier System or One-Tier System Body437

B. Chairman and CEO (One or Two People/Checks and Balances)438

C. Board Structures438

D. Elections/Staggering439

E. Delegation439

F. Removal of Directors439

Ⅱ. Recent Cases Dealing with Directors' Liability440

Ⅲ. Judicial Review (Tightening of Standards?)440

Ⅳ. 'Socio-Anthropological Issues'441

A. Composition of the Board of Directors441

B. Decision-Making Mechanism441

C. Board/Management Relationship441

Ⅴ. Corporate Governance441

Ⅵ. Liability Issues442

A. Who Can Sue?442

1. The Company442

2. The Shareholder442

3. Trustee in Bankruptcy442

4. Creditors and Third Parties442

5. The Government443

B. Who Can Be Sued?443

C. Thresholds and Limitations/Caps of Liabilities in the Netherlands (Statutory Limitations on Directors' Liability)443

D. Joint Liability/Solidarity443

E. Derivative Actions444

F. Class Actions444

G. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit445

H. Costs and Fees in Liability Litigations445

Ⅶ. Indemnification445

ⅤⅢ. Directors' and Officers' Insurance446

Ⅸ. Lawyer Directorship447

Ⅹ. The 'European Action Plan'447

A. Modernizing the Board of Directors447

B. Implementation447

Chapter 35 Poland&Tomasz Zak449

Ⅰ 'National Basics' and National Legal Theories of Directors' Liability449

A. Two-Tired or Unitary Company Structure449

B. Chairman and CEO450

C. Board Structure450

D. Directors' Election/Staggering451

E. Directors' Term of Appointment451

F. Delegation of Powers451

G. Removal and Suspension of Directors452

Ⅱ. Typical Schemes/Behaviour to Avoid a Directors' Liability452

Ⅲ. Corporate Governance453

A. Management Board453

B. Supervisory Board454

Ⅳ. Liability Issues454

A. Liability Towards the Company454

B. Liability towards Third Parties455

C. Derivative and Class Actions457

D. Costs458

E. Criminal Liability458

Ⅴ. Indemnification458

A. Liability towards Third Parties458

B. Liability towards the Company459

Ⅵ. Directors' and Officers' Insurance459

Ⅶ. Lawyer Directorship459

Chapter 36 Portugal&Miguel de Avillez Pereira and Bruno Sampaio Santos 'National Basics' and National Legal Theories of Directors' Liabilities461

Ⅰ National Basics and National Legal Theories of Directors' Liabilities461

A. Two-Tier System or One-System Body461

B. Chairman and CEO (One or Two People/Checks and Balances)462

C. Board Structures462

D. Elections/Staggering462

E. Delegation463

F. Removal of Directors463

Ⅱ. Recent Cases Dealing with Directors' Liability464

Ⅲ. Judicial Review (Tightening of Standards?)464

Ⅳ. 'Socio-Anthropological Issues'465

A. Is the Composition of the Board of Directors Changing in Portugal in Light of Recent Developments?465

B. Are the Decision-Making Mechanisms Changing in Portugal in Light of Recent Developments?466

C. Board/Management Relationship466

Ⅴ. Corporate Governance466

Ⅵ. Liability Issues467

A. Who Can Sue?467

1. Liability towards the Company467

2. Liability towards Shareholders (and Other Third Parties)467

3. Liability towards Creditors of the Company468

4. Liability before Tax Authorities and Social Security468

B. Who Can Be Sued?468

C. Thresholds and Limitations/Caps of Liabilities in Portugal (Statutory Limitations on Directors' Liability)468

D. Joint Liability/Solidarity469

E. Derivative Actions469

F. Class Actions469

G. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit469

H. Costs and Fees in Liability Litigations470

Ⅶ. Indemnification470

ⅤⅢ. Directors' and Officers' Insurance470

Ⅸ. Other Methods of Protection470

Ⅹ. Lawyer Directorship471

Ⅺ. The 'European Action Plan' 471

Chapter 37 Spain&Enric Picanyol, Coro Ferndndez-Ranada and ldoya Ferndndez473

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities473

A. Two-Tier versus 'One-System' Body473

B. Chairman and CEO474

C. Board Structure474

D. Elections/Staggering474

E. Delegation475

F. Removal of Directors475

Ⅱ. Recent Cases Dealing with Directors' Liability475

A. General Rules475

B. Infra-capitalization476

Ⅲ. Judicial Review476

Ⅳ. 'Socio-Anthropological Issues'477

Ⅴ. Corporate Governance477

Ⅵ. Liability Issues478

A. Who Can Sue?478

1. Corporate Action478

2. Individual Action479

B. Who Can Be Sued?479

1. Directors479

2. Corporate Entities as Directors479

3. 'De Facto' Directors479

4. Liquidators480

5. Persons Holding Powers of Attorney480

C. Thresholds and Limitations480

1. Statute of Limitations480

2. Negligence480

D. Joint Liability/Solidarity481

E. Derivative Actions481

F. Class Actions481

G. Relevance of Bankruptcy of Corporation with Regard to Bringing a Directors' Liability Suit482

Ⅶ. Indemnification483

ⅤⅢ. Directors' and Officers' Insurance483

Ⅸ. Other Methods of Protection484

Ⅹ. Lawyer Directorship484

Ⅺ. The 'European Action Plan'485

Chapter 38 Sweden&Per Berglof and Sverker Bonde487

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities487

A. Business Form and the Legal Framework487

B. Basic Organization and Corporate Bodies of a Swedish Aktiebolag488

C. Responsibilities of the Different Organs and Delegation488

D. Election and Removal of Directors489

Ⅱ. Recent Cases Dealing with Directors' Liability490

Ⅲ. Judicial Review of Directors in Sweden490

Ⅳ. Corporate Governance491

A. Composition of the Board491

B. Decision-Making Mechanisms: Board Committees491

C. Duties of Directors towards the Company492

D. Duties of Directors towards Majority and Minority Shareholders492

E. Duties of Directors in Case of Bankruptcy492

Ⅴ. Liability Issues493

A. Legal Framework493

B. Who Can Sue and Be Sued?493

1. The Company493

2. Shareholders: Derivative Actions494

3. Creditors and Other Third Parties494

4. Insolvency Administrators/Trustees in Bankruptcy494

C. Directors' Criminal Liability494

D. 'De Facto' Directors' Liability494

E. Thresholds and Limitations to Liability495

F. Class Actions495

G. Costs and Fees in Liability Litigations495

Ⅵ. Indemnification by the Company and Insurance495

Ⅶ. Other Methods of Protection496

ⅤⅢ. Lawyer Directorship496

Ⅸ. Forecast on Future Legislation Development496

Chapter 39 Switzerland&Matthew T. Reiter and Felix R. Ehrat499

Ⅰ. Directors' Liability in Switzerland: The Basic Legal Regime499

A. Introduction499

B. Flexible One-Tier System500

C. Board Structures, Chairman and CEO500

D. Election and Removal of Directors, Nationality and Domicile Requirements501

E. Delegation501

Ⅱ. Recent Cases Dealing With Directors' Liability502

A. Claims of the Company in Good Standing502

B. Late Filing for Insolvency504

C. Liability for the Issuance of Prospectuses504

Ⅲ. Standards of Judicial Review505

Ⅳ. Corporate Governance505

Ⅴ. Liability Issues506

A. Grounds for Liability and Prerequisites in General506

B. Who Can Sue?507

C. Derivative Actions in Particular508

D. Who Can Be Sued?509

E. No Thresholds and Limitations on Directors' Liability509

F. Joint and Several Liability510

G. No Class Actions510

H. Costs and Fees in Liability Litigations510

Ⅵ. Indemnification511

Ⅶ. Directors' and Officers' Insurance511

ⅤⅢ. Other Methods of Protection for Directors on the Board of a Swiss Corporation512

Chapter 40 Ukraine&Timur Bondaryev and Pavlo Khodakovsky513

Ⅰ 'National Basics' and National Legal Theories of Directors' Liabilities513

A. Two-Tiered or Unitary Company Structure513

B. Chairman/CEO Executive Body515

C. Board Structures515

D. Directors' Elections/Staggering515

E. Directors' Term of Appointment516

F. Delegation of Authorities (Powers)517

G. Removal of Directors (Dismissal, Recalling, and Suspension)517

Ⅱ. Recent Cases Dealing with Directors' Liability518

Ⅲ. Judicial Review519

Ⅳ. Typical Schemes/Behaviour to Avoid Directors'Liability519

Ⅴ. Corporate Governance520

Ⅵ. Liability Issues521

A. Who Can Sue?521

B. Who Can Be Sued?522

C. 'De Facto' Director522

D. Thresholds and Limitations/Caps of Liabilities (Limits of Directors' Liability)522

E. Joint Liability/Solidarity523

F. Derivative Actions524

G. Class Actions524

H. Relevance of Bankruptcy of Corporation524

Ⅶ. Indemnification524

ⅤⅢ. Directors' and Officers' Insurance525

Ⅸ. Other Methods of Protection525

Ⅹ. Lawyer Directorship525

Ⅺ. Forecast on Future Legislation Development525

Chapter 41 United Kingdom&Karla Dudek527

Ⅰ. 'National Basics' and National Legal Theories of Directors' Liabilities528

A. Two-Tiered or Unitary Company Structure528

B. Chairman and CEO528

C. Board Structures528

D. Directors' Elections/Staggering529

E. Directors' Term of Appointment530

F. Delegation530

G. Removal of Directors530

Ⅱ. Recent Cases Dealing with Directors' Liability531

Ⅲ. Judicial Review532

Ⅳ. Typical Schemes/Behaviour to Avoid Director's Liability532

Ⅴ. Corporate Governance533

A. Board Procedures533

B. Structure of Oversight534

Ⅵ. Liability Issues535

A. Who Can Sue?535

B. Who Can Be Sued?535

C. 'De facto' Director536

D. Thresholds and Limitations/Caps of Liabilities536

E. Joint Liability/Solidarity536

F. Derivative Actions536

G. Class Actions537

H. Relevance of Bankruptcy of the Corporation537

Ⅶ. Indemnification538

ⅤⅢ. Directors' and Officers' Insurance538

Ⅸ. Other Methods of Protection538

Ⅹ. Lawyer Directorship539

Ⅺ. Forecast on Future Legislation Development539

Subject Index541