The German Federal Court of Justice (3 StR 329/21) was able to comment on the breach of a duty to look after assets as a board member of a public limited company. The BGH emphasized that, from a legal point of view, it must be assumed that the management board of a stock corporation must be granted a wide scope of action when managing the business of a company, without which entrepreneurial activity is absolutely inconceivable.
Infidelity and business risks
The BGH has recognized that, in addition to consciously
taking business risks, accepting the danger of being subject to misjudgements and misjudgements in business activities is part of everyday business life.
A breach of duty only exists if the limits within
which entrepreneurial action must be based on a sense of responsibility, exclusively oriented towards the company’s welfare and based on a careful determination of the basis for decision-making are exceeded, the willingness to take entrepreneurial risks is irresponsibly overstretched or the conduct of the Management Board must be considered to be in breach of duty for other reasons.
These principles developed for stock corporation law, which have since been codified as the so-called “Business Judgement Rule” in Section 93 para. 1 sentence 2 AktG, are also the benchmark for the existence of a breach of duty within the meaning of Section 266 para. 1 StGB. A decision based on inadequate facts can indicate such a breach of duty according to the case law of the Federal Court of Justice. Ultimately, however, this can only be affirmed if the actions of the management board are completely unjustifiable; the management error must also be formally apparent to an outsider!
Information obligations of members of the Management Board
It is recognized that the duty of information of members of the Board of Directors generally requires that all available sources of factual and legal information be exhausted in the specific decision-making situation in order to carefully assess the advantages and disadvantages of the existing options for action and take account of the identifiable risks.
The specific decision-making situation is then the frame of reference for the extent of the duty to provide information. Accordingly, it is necessary, but also sufficient, for the management board to obtain an “appropriate” factual basis, taking into account the time factor and weighing up the costs and benefits of obtaining further information; depending on the importance of the decision, a broader information basis may be legally required. Ultimately, the management board is entitled to a scope adapted to the specific individual case to weigh up the information required to prepare its entrepreneurial decision. The decisive factor here is not whether the decision was actually made on the basis of appropriate information and was in the best interests of the company, but whether the Management Board could reasonably assume this.
The assessment of the Management Board at the time of the decision-making process must appear justifiable from the perspective of a prudent manager.
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