Under the Slovak Commercial Code, managing directors are obliged to exercise their powers with professional care and in accordance with the interests of the company and all its shareholders. In particular, they are obliged to obtain and take into account in their decision-making all available information relating to the subject of their decision, to keep in confidence confidential information and facts whose disclosure to third parties could cause harm to the company or endanger its interests or the interests of the company’s shareholders. Further, while exercising their powers, managing directors must not give priority to their own interests, the interests of only certain shareholders or the interests of third parties over the company’s interests.
Should managing directors breach their obligations while exercising their powers, they shall be obliged to compensate (jointly and severally) the damage caused to the company.
However, managing directors shall not bear liability for damage, if they can prove that they proceeded in exercising their powers:
- with professional care and
- in good faith that they were acting in the company’s interest.
Further, the managing directors shall not be liable for damage caused to the company by their conduct in executing a decision of the general meeting; this shall, however, not apply (i. e. the managing director shall bear liability for damage) if the general meeting’s decision is:
- contrary to legal regulations, the company’s memorandum of association or articles of association or
- if it concerns the obligation to file the petition in bankruptcy.
In this regard we would also like to draw your attention to the fact that any agreements between the company and its managing director that exclude or limit the managing director’s liability are prohibited; neither the memorandum of association nor articles of association may limit or exclude an managing director’s liability.
A company may waive its claims for damages against its managing directors or may conclude a settlement agreement with them only after three years since such claims arose. However, the general meeting must consent to such waiver and no shareholder or shareholders whose investment contributions amount to 10% of the registered capital must register their protest against such decision at the general meeting in the minutes.