Vorstandshaftung und Vorstandsermessen

The liability of executive board members (Vorstandsmitglieder) of German corporations (Aktiengesellschaft) has recently become a centre of attention in corporate law; there has also been a significant increase in the number of liability cases. The author examines selected aspects of directors’ liability from both a legal and economic perspective.
First, the requirements of sec. 93 of the German Stock Corporation Act (Aktiengesetz) as well as the economic aims of directors’ liability are set out. A first emphasis is placed on the analysis of the business judgment rule which was codified in the Stock Corporation Act in 2005. The author then deals with the question of whether board members of private and public German banks are liable to their banks for investing in US mortgage backed securities prior to the financial crisis which later became worthless. Further, an overview of criminal law aspects is provided. The final chapter explores the mandatory retention applying to D&O insurances introduced by the German legislator in 2009.