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Fraudulent phoenix occurs when the managers of a company, with the aim of avoiding some or all of its legal obligations, declare the company bankrupt and continue their business by creating a new company. One of the most important debts that remain unpaid during this operation is the company's tax debt. In section 198 of Iranian Direct Taxes Law, the legislator has held managers jointly and severally liable for paying the company's taxes. The subject of this research is to discuss the similarities and differences between the legal systems of Iran and Australia in relation to the liability of managers for tax debts arising from fraudulent phoenix activities. The result of the research shows that in Iran, unlike Australia, it is not possible to release managers from the responsibility of paying taxes of a bankrupt company under any excuse or defense. Also, while in Iran managers are responsible for paying all sources of taxes, in Australia directors are only responsible for paying taxes in which the company is the tax collector and not the actual payer. Nevertheless, there are similarities between the two systems in terms of responsibility of managers and stipulation of other restrictions for directors. Given the inflexibility of the regulations in Iran, it is suggested that the legislator changes the basis of manager’s liability to presumed fault liability and provide the opportunity of defense for managers who have taken all reasonable measures to fulfill their tax obligations but have not succeeded. It is also necessary to establish regulations regarding disqualification of directors who have been involved in the bankruptcy of numerous companies.

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The research presented in the article aims to identify the criteria for determining the law applicable to third party claims against board members and parent companies for non-contractual obligations. The article examines the provisions of EU law and the case law of the Courts of Justice on the basis of the dogmatic method, combined with elements assessing the economic efficiency of the identified approaches. Research on this topic is prompted by the absence of an adequate legal framework determining the qualification of the claims in question. The Rome II Regulation only provides for the exclusion of company law claims from its scope. However, this exclusion does not provide criteria for determining which claims fall under company law. This issue was recently addressed by the Court of Justice in the case of BMA AG, C-498/20, concerning the scope of the law applicable to the liability of a German company for breach of the general duty of care towards the creditors of a Dutch subsidiary. The Court held that such a claim should be classified as lex delicti. The findings of the research suggest that the Court of Justice has not offered clear criteria that would enable national authorities to distinguish between corporate and tort claims. Meanwhile, it seems that there are more arguments in favour of the corporate nature of claims arising from decisions relating to the management of the company’s assets.

The article focuses on the Supreme Court's judgment in BTI 2014 LLC v Sequana SA and others [2022], concerning the fiduciary duty of company directors in relation to a company's insolvency. The topics covered include the directors' duty to consider contingent liabilities, the legality of dividend distributions, and the duty to creditors in cases of insolvency or potential insolvency and the court examined the trigger for the duty and the balance between shareholders' and creditors' interests.

This article provides a comparative perspective on the issue of directors' liability for actions by a company which causes or contributes to human rights impacts. International, European and national regulatory developments in business and human rights are influencing company law. This article will consider directors' duties in relation to the meaning of 'the best interests of a company' and how the expectations on directors from various stakeholders are changing due to legislation, court decisions and practice. Based on this, there is an analysis of the link between directors' duties and human rights due diligence, and about access to remedy for the victims of actions arising from the acts or omissions of directors, including any decisions made by directors without proper regard for the human rights of those affected by the company's activities. It considers what might be the personal liabilities of directors in this area and possible ways forward, including in relation to probable EU regulation on this area. [ABSTRACT FROM AUTHOR]

An enduring problem in company law is the liability of directors to the company for damage caused by wrongful acts. On the one hand, levers must be created whereby this liability exists, is effective, and plays a preventive role: a director is discouraged from carrying out damaging activities. On the other hand, the business world involves taking risks. It is sometimes regular for companies to suffer losses, not because of a mistake by a director but because of factors external to the director’s conduct. The director should therefore be encouraged to take certain risks. It all comes down to a question of balance between responsibility and risk-taking. How this balance has been created in Romanian law, what dilemmas exist, and how the courts apply the rules: the article proposes to analyse these issues. [ABSTRACT FROM AUTHOR]

The duty of care is a core instrument to incentivise managers to act diligently and in the best interest of the company. The following article highlights some key points under Austrian law and puts special emphasis on the business judgment rule, which aims to limit the liability risk of board members arising from the problem of judicial hindsight bias. [ABSTRACT FROM AUTHOR]

The article discusses legal issues regarding tax penalties in Florida by examining the case VMOB, LLC v. Florida Department of Revenue. The case focused on personal liability assessments under FS 213.29. Also cited are the authority of the Florida Department of Revenue to hold officers or directors of companies liable for willful evasion of taxes, and the court's interpretation of the law's abatement provisions.

In this paper the author shows the shortcomings of the business judgment rule in the Serbian Company Act. Business judgment rule is a judicially created American doctrine that has gained widespread popularity in other countries. The trend of legal transplanting has not bypassed our country, and for this reason it is very important to define this rule and to properly understand the reason for its existence. Because of that the first part of this paper is dedicated to analysing the onset and deployment of this specific rule. Although the core of this paper is aimed at defining the subset of people who are protected by this rule, it is as well aimed at determining the precedents needed to get this protection mechanism operational. These conditions actually construct duty of care and are used to define the business judgment rule, and are not unanimously accepted in all law systems. In the paper these conditions have been individually analysed: 1. business decision; 2. absence of conflict of interest; 3. good faith; 4. informed decisions making; 5. the care of a prudent business person and 6. honest belief that the decision was in the company's best interest. The final segment of this paper shows the reverse distribution of the burden of proof which undermines the efficiency of the protective role of the business judgment rule.

The paper at hand will analyze directors’ duty not to make decisions which determine corporate violations of positive legal norms and it will provide an interpretation of corporate governance practices that underpin this duty in pre-existing institutions. In the first part, we will pursue the doctrinal attempts of integrating the duty of compliance within the contents of the duty of care or duty of loyalty. We will follow the evolution of this duty, from a simple effect of the ultra vires doctrine, to an obstacle of the contractual underlying of companies, to an element of the duty of loyalty. The paper will review effects that corporate legal violations have on agents’ liability, such as tax law, competition law, labor law, human rights and environmental law breaches, and will illustrate other essential features of this duty, such as compliance with corporate governance codes, ethics and corporate social responsibility. Finally, we will demonstrate that regardless of the approach of good faith in corporate governance, as a distinct fiduciary duty or as element of the duty of loyalty, the duty of compliance is a prerequisite of good faith and can be accomplished simultaneously with the duty to maximize corporate profit and shareholders' wealth.

Criticism of the rules by which English law holds companies criminally liable for serious economic and financial misconduct is longstanding. Recently, a series of cases and decisions has given new impetus to criticism of the classic common law identification principle, deriving corporate criminal liability from the guilt of a "directing mind" of the company. These are instances where large and multinational companies have admitted liability or been convicted, followed either by the lack of prosecution or, indeed, the outright acquittal of the individuals from whose culpability' the company's liability was stated to derive. Using these cases as a starting point, this article critically assesses the state of corporate criminal liability for serious economic misconduct from the points of view of systemic coherence and collateral fairness. It argues that there is a case for reform of corporate criminal liability to achieve two objectives: First, to separate corporate criminal liability conceptually from individual criminal liability in order to hold companies responsible for the unique, criminally proscribed harms that only they can cause. Second, this reform should ensure fairness to those who suffer the material and reputational consequences of a company's conviction. [ABSTRACT FROM AUTHOR]

This article compares reforms to directors' liability for insolvent trading in Singapore and in Australia. We analyse the law in these two countries because they are important Asia‐Pacific trading partners and their laws were originally largely the same—Singapore's law on insolvent trading reflected the law in Australia from the 1960s. However, the law in the two countries has now diverged substantially. The comparison of these two countries therefore represents an interesting case study in how countries differ in their approaches to balancing the competing interests evident in laws that impose personal liability on company directors for insolvent trading. Reform of the prohibition against insolvent trading was a focus of Australia's insolvency law reforms in 2017, which led to the introduction of a safe harbour for directors from liability. Singapore's omnibus insolvency law reforms of 2018–19 include amendments to update Singapore's fraudulent and insolvent trading provisions by introducing a concept of "wrongful trading." The article finds that there are some areas of convergence between these two jurisdictions when it comes to debates about such provisions but concludes that the different contemporary legislative histories in Australia and Singapore have affected their approaches to reform. Reformers in both jurisdictions have attempted to find an appropriate balance between protecting creditors, discouraging director misconduct, and encouraging entrepreneurship and innovation; however, this comparison suggests that the weight that reformers place on creditor protection compared with the concern that excessive personal liability can make directors unduly risk‐averse is influenced by their existing legislative framework and experience of those laws. Although Australia has shifted away from a strict focus on creditor protection, to give directors more opportunities to engage in restructuring, Singapore's amendments may provide a more creditor‐friendly regime. [ABSTRACT FROM AUTHOR]

Copyright of Rivista di Diritto Societario is the property of Giappichelli Editore srl and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article discusses the duties of corporate directors in South Africa in emergencies like the COVID-19 pandemic. Also cited are the provisions of the Companies Act of 2008 on reckless trading, gross negligence, and the responsibilities of the Companies and Intellectual Property Commission (CIPC), the director's duties like fiduciary responsibilities, and the possible remedies companies should adopt in case of financial distress under the Act.

The business judgment rule represents a central doctrine of corporate governance, due to its major implications on corporate directors' liability and to its infl uence on the relationship between shareholders and the board of directors. The interpretation of the Rule as a behavioral standard or as an „abstention doctrine” can determinatively influence the liability proceedings against directors who acted in consideration of their fiduciary duties. This paper aims at analyzing the national legal provisions of the Business Judgement Rule and the compatibility of the legal provisions with the established interpretations of the Rule that can be found in the foreign literature. Absent a case law that clarifies de approaches of the Business Judgement Rule by the national courts, the research analyzes the traditional Common Law approaches of the Rule and the obstacles which hinder a faithful transfer of the Rule in Romania. The objective of these identifications is to draw de lege ferenda proposals for an efficient application of the legal provisions in the future. Considering that this Rule is the natural consequence of trust and of the powers granted to corporate directors, the conclusions of the research suggest solutions for the stabilization of the continuous tension of the supreme values of the corporate world: authority and liability.

The aim of this contribution is to critically analyze the substance of the duty of loyalty imposed on a director of a company by the New Civil Code and the Business Corporation Act, which came into force in the Czech Republic on 1 January 2014, and consider the consequences of a breach thereof. The interpretation of recodified Czech private law is ambiguous and conflicting and there is neither consistent interpretation nor any case law, while at the moment it is not clear to what extent existing case law applies to these laws. This comparative analysis of the Czech and English concepts of the duty of loyalty aims to indicate a possible interpretation of the transplanted duty of loyalty and discuss theoretical issues connected with directors' liabilty in recodified Czech private law. [ABSTRACT FROM AUTHOR]

We examine the association between directors' liability insurance and investment-cash flow sensitivity with listed firms in Taiwan. We find that directors' liability insurance increases the investment-cash flow sensitivity. Specifically, insured firms are more likely to have excessive investment than uninsured firms given the same level of cash flow. This is the result of managerial opportunistic behaviors fueled by moral hazard inherent in directors' liability insurance. Although managerial opportunism could certainly increase the likelihood of corporate wrongdoing, our results show that it could be mitigated by having improved regulation or corporate governance. [ABSTRACT FROM AUTHOR]

The article discusses an amendment to the Australian Corporations Act of 2001 that created a safe harbor to company directors who adopt a strategy that is likely to improve the operation for the firm and its creditors. Other topics include a brief history of the insolvent trading regime in Australia, the importance of personal liability for insolvent trading, and the two types of company debt, namely, deemed debt and general debt under the common law.

The paper at hand will analyze directors' duty not to make decisions which determine corporate violations of positive legal norms and it will provide an interpretation of corporate governance practices that underpin this duty in pre-existing institutions. In the first part, we will pursue the doctrinal attempts of integrating the duty of compliance within the contents of the duty of care or duty of loyalty. We will follow the evolution of this duty, from a simple effect of the ultra vires doctrine, to an obstacle of the contractual underlying of companies, to an element of the duty of loyalty. The paper will review effects that corporate legal violations have on agents' liability, such as tax law, competition law, labor law, human rights and environmental law breaches, and will illustrate other essential features of this duty, such as compliance with corporate governance codes, ethics and corporate social responsibility. Finally, we will demonstrate that regardless of the approach of good faith in corporate governance, as a distinct fiduciary duty or as element of the duty of loyalty, the duty of compliance is a prerequisite of good faith and can be accomplished simultaneously with the duty to maximize corporate profit and shareholders' wealth. [ABSTRACT FROM AUTHOR]

The article offers a summary of U.S. court rulings affecting private equity and venture capital during 2018. Cases described include Van Der Fluit v. Yates, Southpaw Credit Opportunity Master Fund L.P. v. Roma Restaurant Holdings Inc., and Wilson v. Alharayeri. Topics include the use of LLCs in relation to director liability, the relation of stock issuance to stockholders' agreements, and fiduciary duties related to venture capital fund portfolio optimization.

Under English law, directors' duties change in the vicinity of insolvency so as to require enhanced regard for creditors' interests: that is the rule in West Mercia Safetywear v Dodd. This rule is conventionally analysed as a constraint on directors deploying assets in risky ventures in insolvency. However, a review of the case law shows that the rule performs a very different function: the regulation of payments to creditors in the lead-up to insolvency proceedings. On its own, the rule functions as an alternative to a preference action, providing recourse against the director who authorised the payment, rather than against the payee. Combined with accessory liability rules, the rule can also function as a substitute for a preference action, providing a different way of obtaining recourse against the payee. The first of these functions, however, raises a serious remedial problem-- acknowledged by the courts--that appears ripe for consideration at an appellate level. [ABSTRACT FROM AUTHOR]

Dishonest breach of trust by company directors was proscribed under section 405 of the Penal Code from inception. From this fundamental orientation departing from the English piecemeal treatment of embezzlement, false pretences and conspiracy to defraud, the article exposes differences in the way director's breach of trust is dealt with under section 405 and under the English statutory offence of embezzlement. Taking into account important backdrop perspectives which bear on the construction of section 409 as a punishability provision, it reaches conclusions opposite to the holding of the Court of Appeal in Lam Leng Hung (CA). One is that directors who commit dishonest breach of trust acting within the scope of authority fall to be punished more severely under the second agency-limb of section 409. Directors who knowingly act without authority in the company's name also do so but under the first limb. Finally, directors who misappropriate company property for personal use or benefit do not fall within section 409 and are punishable exclusively under section 406. [ABSTRACT FROM AUTHOR]

This article argues that there is a profound disconnect between corporate governance -- accountability from the board to the shareholders -- and a fundamental doctrine in company law, which I shall demonstrate is that directors are not and should not be legally required to act in the shareholders' interests. Given that under the law, directors are not and should not be under a duty to act in the shareholders' interests, the notion of directorial accountability to shareholders does not have a compelling legal basis and thus has to be reconsidered. [ABSTRACT FROM AUTHOR]

The Hong Kong Court of Final Appeal has utilised a 'scope of business' inquiry to delineate the boundaries of the no-conflict rule for the company director. Such an inquiry is directed at discerning the realistic ability of the company to exploit any particular business opportunity and a strict capacity approach is eschewed, at least where the no-conflict rule is concerned. The decision is premised on a bifurcation between the no-conflict and no-profit rules, suggesting that the tests to determine breach of these fiduciary rules are not necessarily the same, thus permitting a more nuanced consideration of directorial breaches. [ABSTRACT FROM AUTHOR]

The topic of the corporate veil is one that has been long-discussed, but which remains the subject of considerable debate and uncertainty. This lecture will look at a few areas related to veil-piercing or lifting, used in a broad sense, which usefully highlight the tensions the courts have to grapple with when faced with corporate structures and the question of whether to look behind those structures to commercial realities. The topics canvassed are directors' liability for corporate fault, limited liability and corporate groups, and direct liability of parent entities in tort. [ABSTRACT FROM AUTHOR]

Copyright of Revista Română de Drept al Afacerilor is the property of Wolters Kluwer Romania and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article provides guidance regarding the standard of conduct for directors of benefit corporations in America as of 2017, and it mentions the prioritization of a specific public benefit. Directors' liability and fiduciary duties are addressed,, as well as a Model Benefit Corporation Act and the Patagonia Inc. outdoor apparel and equipment firm's social and environmental sustainability policies. State specific public benefit statutes in America are assessed.

Taking the duty of loyalty as a starting point, which we consider to be the director's core fiduciary duty, this paper aims at identifying the contours of good faith in corporate law and the interpretations of this institution in corporate governance. The objective of the paper is to demonstrate the autonomy of good faith, along with the duty of care and the duty of loyalty. The paper displays the traditional legal approaches of this institution, both in continental civil law and in common law literature and jurisprudence and exhaustively describes the obligations that compose or even define this concept. Due to its amplitude, the duty of good faith enabled courts to articulate subsidiary fiduciary duties that meet social changes and transformation within business law. By means of cited case law, the conclusion will show that due to the nature, content and effects of situations where specific obligations are met, these may not be incorporated as elements of the traditional duty of care or duty of loyalty. [ABSTRACT FROM AUTHOR]

What is the role of ‘assumption of responsibility’ when determining directors’ liability in negligence to third parties? A recent decision of the English High Court of Justice confirms that, so far as the English courts are concerned, ‘assumption of responsibility’ is a threshold test for establishing liability. This test requires conduct that would lead a third party to conclude that the director intended to assume personal responsibility. However recent academic writing argues that assumption of responsibility is not a threshold test, but rather a subset of proximity. This note suggests that a preferable approach, which is the approach taken by New Zealand courts, is to apply a two-stage proximity plus policy inquiry, which enables the court to address policy considerations relevant to imposing liability on directors. [ABSTRACT FROM PUBLISHER]

This article suggests that the "elements of the tort" approach to directors' liability in negligence to third parties should be discontinued on the basis that assumption of responsibility as a threshold test is not an element of the tort of negligence or negligent misstatement and a more constructive approach would be to address the policy issues associated with imposing liability on directors as part of the two-stage duty of care inquiry. [ABSTRACT FROM AUTHOR]

The article examines the laws concerning directors' powers in Great Britain and discusses the proper purposes rule. It reports that proper purposes doctrine is a cornerstone of the law of legal powers as codified in the British Companies Act 2006. It reports fiduciary obligations affecting a director as described in the rule.

The article examines the laws concerning breaches of fiduciary duty by corporate directors. Topics discussed include correlation between board independence and corporate performance; business judgment rule related to reasonableness of a board's actions; and decision of Delaware Court of Chancery in the case 'Chen v. Howard-Anderson.'

Copyright of Revista Română de Drept al Afacerilor is the property of Wolters Kluwer Romania and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose – The purpose of this paper is to evaluate the accountability practices of the directors in New Zealand and Australian dairy co-operatives. An interpretation of their practices, which focus on the relationship between directors and their farmer-shareholders, is informed by Roberts’ (2001a) understandings of a socializing accountability. Design/methodology/approach – The fieldwork consists of interviews with 23 directors, including all chief executive officers and chairmen, of six dairy co-operatives together with observations and document analysis. These co-operatives together comprise a significant portion of the regional dairy industry. The methodology draws from Eisenhardt’s (1989) qualitative approach to theory formation. Findings – The authors find that these directors engage in a discourse-based, community-grounded and egalitarian form of socializing accountability. As such, their practices adhere generally to Roberts (2001a) hopes for a more considerate and humble relationship between an accountor and an accountee. Social implications – Findings add to the small pool of research on the lived experiences of co-operative boards and to a parsimonious literature in socializing accountability practices. The contributions of the study are in advancing real understandings of alternative forms of accountability, in evaluating the conditions in which these alternatives may be likely to arise and in anticipating the challenges and opportunities that arise therefrom. Originality/value – The originality of the project arises from accessing the views of these industry leaders and, through their frank expressions, coming to understand how they achieve a form of a socializing accountability in their relationships with farmer-shareholders. [ABSTRACT FROM AUTHOR]

The business judgment rule represents a central doctrine of corporate governance, due to its major implications on corporate directors' liability and to its influence on the relationship between shareholders and the board of directors. The interpretation of the Rule as a behavioral standard or as an ?abstention doctrine? can determinatively influence the liability proceedings against directors who acted in consideration of their fiduciary duties. This paper aims at analyzing the national legal provisions of the Business Judgement Rule and the compatibility of the legal provisions with the established interpretations of the Rule that can be found in the foreign literature. Absent a case law that clarifies de approaches of the Business Judgement Rule by the national courts, the research analyzes the traditional Common Law approaches of the Rule and the obstacles which hinder a faithful transfer of the Rule in Romania. The objective of these identifications is to draw de lege ferenda proposals for an efficient application of the legal provisions in the future. Considering that this Rule is the natural consequence of trust and of the powers granted to corporate directors, the conclusions of the research suggest solutions for the stabilization of the continuous tension of the supreme values of the corporate world: authority and liability. [ABSTRACT FROM AUTHOR]

An individual need not be formally elected or appointed to the position of company director to be considered a director-in-fact for tax purposes. This article discusses the circumstances in which, according to the case law, an individual may be considered a de facto director of a corporation and may therefore be subject to the director liability provisions of the Income Tax Act and/or the Excise Tax Act. Precautions to avoid creating a de facto directorship and steps that may be taken to end a de facto directorship are also discussed. [ABSTRACT FROM AUTHOR]

The duty of care, which sets the standard of conduct of a „good director” is currently governed by the Romanian Companies Act and the Civil Code. The corroboration of the two legal acts is challenging, the paper in hand aims at a comparative view of the legal norms and at the appraisal of the content of this fiduciary duty in the modern context of the competitive economy. The nature of this fiduciary duty and the cases when it can be defied according to the Romanian Law are discussed in terms of the literature and the case law that inspired the legislator. By creating parallels between the content of the agency and the traditional characters of the director's office, mainly tagged with legal prerogatives, the study will reveal the importance of the fiduciary characters of the director's function. The conclusions will catch the effects of standardizing the substantive exercise of the duty of care and the importance of defining the fiduciary character of directors' duties, both with respect to case law and as well for healthy business relationships. [ABSTRACT FROM AUTHOR]

The article reports the Tax Court of Canada's decision in case 'Whissell v. The Queen' in which court addressed the issue related to comparable circumstances for the purposes of the director due diligence defense.

The article focuses on decision taken by the Great Britain Supreme Court for court case Bilta (UK) Ltd (in liquidation) and others v. Nazir and others including illegal actions of directors, claims for compensation against relevant defendants and rejection of applications.

The article discusses how insufficient attention to board engagement with business strategy may leads to the failure of the business. Topics discussed include reasons for failure of Canadian technology giant Nortel Networks such as inefficient business acquisitions strategy, accounting restatements and bankruptcy filing; need of a board committee to deal with business strategy and constantly monitoring of a corporate enterprise; and increased role of board of under-performing companies.

This study examines the severity of the problem entailed by private benefits extraction in the corporate arena and, from there, underscores the need to fortify the legal treatment of the duty of loyalty of directors, where the author places the very heart of any meaningful corporate law. Following this examination, the author proceeds to identify the principal insufficiencies or imperfections that have traditionally beleaguered our legal framework and assesses the measures implemented by the recently adopted Law 31/2014 (amending the Companies Act to improve corporate governance) to mitigate them. This exercise enables the fundamental aspects of the duty of loyalty to be dissected, thereby revealing the basic structure of the new regulations. [ABSTRACT FROM AUTHOR]

The liability regime for officers and directors of German companies combines strict and lenient elements. Officers and directors are liable for simple negligence, they bear the burden of proof for establishing diligent conduct, and they are liable for unlimited damages. These elements are worrisome for the reason that managers are confronted with the full downside risk of the enterprise even though they do not internalize the benefits of the corporate venture. This overly strict regime is balanced by other features of the regime, namely comprehensive insurance and systematic under-enforcement. Even though the authority to enforce claims against the management is divided between three different actors - the supervisory board, the shareholders assembly, and individual shareholders - enforcement has remained the exception. Furthermore, under the current system of Directors' and Officers' (D&O) liability insurance, board members do not feel the bite of liability as they are protected by an insurance cover that is contracted and paid for by the corporation. Thus, the current German system may combine the worst of two worlds, i.e., the threat of personal liability for excessively high amounts of damages in exceptional cases, and the practical irrelevance of the liability regime in run-of-the-mill cases. The present Article analyzes the shortcomings of the present regime and submits proposals for reform. [ABSTRACT FROM AUTHOR]

After a crisis, broad and sweeping reforms are enacted to restore trust. Following the 2007-2008 Great Financial Crisis, the European Union has engaged in an ambitious overhaul of banking regulation. One of its centerpieces, the 2013 Fourth Capital Requirements Directive (CRD IV), tackles, amongst other things, the perceived pre-crisis failings in the governance of banks. We focus on the provisions that are aimed at reshaping bank boards' composition, functioning, and their members' liabilities, and argue that they are unlikely to improve bank boards' effectiveness or prevent excessive risk-taking. We criticize some of them for mandating solutions, like board diversity and the separation of chairman and CEO, that may be good for some banks but are bad for others, in the absence of any convincing argument that their overall effect is positive. We also criticize enhanced board liability by showing that it may increase the risk of herd behavior and lead to more serious harm in the event of managerial mistakes. We also highlight that the push towards unfriendly boards will negatively affect board dynamics and make boards as dysfunctional as when the CEO dominates them. We further argue that limits on directorships and diversity requirements will worsen the shortage of bank directors, while requirements for induction and training and board evaluation exercises will more likely lead to tick-the-box exercises than under the current situation in which they are just best practices. We conclude that European policymakers and supervisors should avoid using a heavy hand, respectively, when issuing rules implementing CRD IV provisions with regard to bank boards and when enforcing them. [ABSTRACT FROM AUTHOR]

The article focuses on the historical development of the corporate law in the U.S. Topics discussed include the role of authors in deploying the anti-director rights index (ADRI), the importance of quantification of corporate law in comparing the corporate governance, and the views of law professor Larry Ribstein in defining various aspects related to corporate law.

Directors' and officers' (D&O) liability insurance is a commonly used risk management tool for corporations both in the United States and abroad. While prior research has focused on the demand for D&O insurance and its role in corporate governance, there is an absence of literature on the supply side of the D&O market. Using the newly available D&O Insurance Coverage Supplement to insurers' statutory filings, we develop a more comprehensive understanding of the D&O insurance market and of those firms that write D&O coverage. We develop and estimate a model of the decision to write D&O insurance and the extent of market participation. Our results suggest that there are significant operational and financial differences between firms that supply D&O insurance and those that do not. Several of these differences (specifically, size, diversification, and organizational form) are consistent with the predictions of the managerial discretion hypothesis. [ABSTRACT FROM AUTHOR]