Corporate governance and directors' and officers' liability

With a new investor, an advisory board or changed management, new expectations of company management often arise. Which decisions should remain part of day-to-day business? Which transactions require prior approval? Who deals with conflicts of interest?

We draft the necessary rules in the articles of association, shareholders' agreement and rules of procedure. Lists of matters requiring approval must reflect the company's actual decision-making needs. Requirements that are too broad can make daily processes more difficult; unclear requirements lead to disputes about whether approval was required.

We set out which reports shareholders receive and when they are informed about exceptional matters. Regular reports are subject to different requirements than information about an extraordinary matter.

We advise on the design of reporting duties and information rights. This includes coordination with the tasks of management, shareholders and, where applicable, an advisory board or supervisory board. For an advisory board, its powers, composition and decision-making procedures must be expressly defined.

The entry of an investor may require new rules for corporate planning, financing and significant transactions. If the previous owner retains a shareholding, that person's future role also has to be clarified.

PBL links corporate law structuring with transaction advice. Provisions in the purchase agreement, the shareholders' agreement and the rules of procedure are coordinated with one another. In business succession, the roles of the current and next generation must also be taken into account.

Significant decisions need a traceable basis. This includes the competence of the decision-making body, the available information and required approvals.

We assist with the legal preparation of such decisions and the documentation of the procedure. A distinction must be made between questions that fall within business judgment and legal requirements that must be observed.

If a managing director, management board member or supervisory board member is accused of a breach of duty, the specific matter, the allocation of responsibilities at the time and the alleged damage have to be examined. An economically unfavorable outcome is not sufficient on its own to establish personal liability.

Depending on the mandate, PBL advises the company or the director or board member concerned. Before taking on the matter, we clarify who the client is, who may represent the company and whether conflicts of interest exist. If the allegation is based on an internal investigation, its confirmed findings form the starting point for the further legal assessment.