Personal liability of the board of directors

The Board of Directors plays a central role in the management and supervision of corporate groups in Switzerland. This role brings with it not only authority and influence, but also considerable responsibility and liability risks. The liability of the board of directors is set out in various legal frameworks designed to ensure that directors perform their duties in the best interests of the company and its stakeholders.

Legal basis of liability

The Swiss Code of Obligations (CO), in particular Art. 717 ff CO, forms the basis for the liability of the Board of Directors. These provisions oblige members of the Board of Directors to carry out their duties carefully and in the best interests of the company. Breaches of these duties can lead to personal liability claims. Furthermore, company law and group law play an important role in defining and structuring liability.

Liability requirements

The liability of the Board of Directors presupposes a breach of duty, which generally implies negligence or misconduct in the execution of the duties of the Board of Directors. This breach of duty must lead to damage and there must be a causal link between the breach of duty and the damage. The burden of proof generally lies with the party asserting the claim.

Specific liability risks

Specific liability risks for the Board of Directors arise in particular in the event of inadequate monitoring of management, inadequate risk assessment and management, as well as breaches of statutory provisions and internal guidelines. In a group context, the complex structures and interaction between parent companies and subsidiaries are also relevant and can pose additional challenges in terms of liability.

Consequences and avoidance of liability

The consequences of liability for board members can range from claims for damages to criminal prosecution. To avoid liability risks, it is crucial that board members fulfill their duties of care through thorough due diligence processes, the implementation of effective compliance systems and ongoing training. D&O insurance (Directors and Officers Liability Insurance) can provide additional protection.

Conclusion

The liability of the board of directors in a group under Swiss law is a complex area that requires careful observance of the legal provisions and conscientious performance of the duties of the board of directors. In a constantly changing economic and legal landscape, it remains an ongoing challenge for boards of directors to effectively manage their liability risks. A proactive and knowledgeable approach is therefore essential to ensure effective corporate governance and minimize liability risks.