Legal Liability of Directors and Company Officials Part 1: Substantive Grounds for Liability (Report to the Russian Securities Agency)

Monday, January 1st, 2007 at 12:00 am by Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Mathias Siems, Lina Prava Law Firm
Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Mathias Siems, Lina Prava Law Firm, Legal Liability of Directors and Company Officials Part 1: Substantive Grounds for Liability (Report to the Russian Securities Agency), 2007 Colum. Bus. L. Rev. 614

This Article contains chapters 1 and 3 of a World Bank sponsored Report, prepared in December 2006, to the Russian Federal Service for the Financial Market (FSFM). It discusses 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. It proposes 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. The Article includes an Introduction for Prof. Black which provides an overview of Russia’s progress in creating a modern company law. A related Article includes chapters 8-9 and 11-13 of the Report, and 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), 2008 Colum. Bus. L. Rev., available at http://ssrn.com/abstract=1010307. The full Report is available at htpp://ssrn.com/abstract=1001990 (English version) and http://ssrn.com/abstract=1001991 (Russian version).

Author Information

Black is Hayden W. Head Regents Chair for Faculty Excellence, University of Texas Law School, and Professor of Finance, University of Texan, Red McCombs School of Business, Cheffins is S.J. Berwin Professor of Corporate Law, Faculty of Law, Cambridge University, United Kingdom. Gelter is at Vienna University of Economics and Business Administration, Department of Business Law. Kim is Professor of Law at Seoul National University College of Law. Nolan is Senior Lecturer at the University of Cambridge, Faculty of Law. Siems is Reader at the University of Edinburge Faculty of Law and Research Associate at the Centre for Business Research at the University of Cambridge.