Director's liability

Barcelona, 27 de mayo de 2014

Agenda

The management, representation and administration duties of company executives and the members of board of directors involve important obligations and responsibilities.

Understanding the legal consequences of incorporating individuals to boards of directors, as well as the content and extension of the regime of these responsibilities, requires time and reflection.

Act 5/2010, reforming the Criminal Code, which came into force in December 2010, introduced, for the first time in our legal system, the direct criminal liability of legal entities, resulting in the implicit and general obligation for all companies to adopt efficient measures to prevent criminal conduct. This liability is compatible with the individual liability of administrators, directors and employees committing crimes that should have been avoided.

After three years of the Act’s applicability, in the framework of a new reform of the Criminal Code in Draft Bill of October 4, 2013, important amendments have been made in this area with the aim of (i) clarifying issues that had generated doubts, and (ii) delimiting what the definition of “proper supervision” should be. The main difference with the current regime is that the new reform establishes express and specific obligations that, once complied with, release legal entities from liability, but that, if not complied with, involve the criminal liability of the legal entity, as well as that of its administrators for not having adopted the required monitoring and supervisory measures, which is considered omissive conduct and is defined as a crime under the new article 286 six of the Draft Criminal Code.

Given the new future scenario, we consider it appropriate to examine the content of the new legal regime and to review the guidelines or criteria companies have followed until now, paying particular attention to the relevance for administrators and companies of the legal consequences derived from incompliance.

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