Directors' liability

Strategic advice in financial heavy weather

Directors and supervisors are expected to exercise sound management, but the consequences of board decisions are not always predictable. If an acquisition, investment, partnership, or financing decision later proves to be misguided, discussions around personal liability often arise. Now more than ever.

Liability in times of financial distress

When a company faces financial difficulties, management decisions are often scrutinized. In such high-pressure situations, where liquidity is insufficient to pay all creditors on time, directors must make critical choices about business continuity, creditor payments, and the use of restructuring mechanisms. These decisions carry the risk of personal, fiscal, civil, and even criminal liability.

Stakeholders are increasingly challenging directors, and legislative changes have expanded the grounds for liability. Since 2021, directors and supervisors of foundations and associations face a greater risk of personal liability in bankruptcy cases. Additionally, under the GDPR (General Data Protection Regulation, 2018), the Dutch Data Protection Authority (Autoriteit Persoonsgegevens) has the power to fine directors personally for data protection violations.

The growing importance of sustainable business practices

Beyond financial and legal risks, directors and supervisors must also navigate evolving societal expectations. Corporate governance is now a core pillar of sustainable business practices (ESG: Environmental, Social, and Governance). Changing views on corporate purpose, responsibilities, and accountability are reflected in the proposed amendments to the Dutch Corporate Governance Code (2022) and the draft EU guidelines on Corporate Sustainability Due Diligence (2022).

Legal action against directors is on the rise, particularly in cases related to corporate responsibility. For example, the recent lawsuit ClientEarth vs. the directors of Shell demonstrates how directors can be held personally accountable for climate-related governance failures.

How Davids law can assist

We support directors and supervisors in navigating these complex legal landscapes. Our expertise helps prevent and mitigate liability risks in the early stages and provides strong legal defense when claims arise.

Want to learn more?

This brochure provides an overview of director and supervisor liability, along with real case examples where we have provided legal assistance. Our specialists are available to offer tailored advice on the risks and responsibilities associated with your position.