Acting in the best interests of the company

Although not explicitly provided for in Book 2 of the Civil Codes of Curacao, St. Maarten and the BES-islands (Bonaire, St. Eustatius and Saba) (“CC”), it is considered a general rule of corporate law that the management board (a.k.a. board of directors) must act in the best interests of the company (an NV or BV) in the performance of its duties, even when acting on instructions from others (e.g. shareholders). This includes the interests of the shareholders, the employees and, according to most legal writers, the creditors of the company.

The management board also has a duty to account to the general meeting (and the supervisory board, if any) for its actions. The duty to account to the general meeting is embodied in the duty to draw up and submit the annual accounts and an annual report to the general meeting.

Based on established case law, the obligation of the members of the management board of an NV or BV to properly carry out their duties is interpreted in such a manner that liability arising from this obligation requires that serious blame to be attributed to such members. Therefore, a managing director of an NV or BV can only be held liable by the company if serious negligence in the performance of his duties is attributable to him.

This standard for internal liability (i.e. the liability of a managing director towards the NV or BV) is also applicable when an individual shareholder holds a managing director of the company liable for the manner in which the latter has carried out his management duties. The laws of Curacao, St. Maarten and the BES-islands do not provide for a shareholders’ derivative suit. Shareholders may have a claim against a managing director who acts tortiously towards the shareholders personally.

In the event of bankruptcy of an NV or BV which is caused by significant mismanagement, each member of the management board is liable towards the bankruptcy estate for the deficit (Article 2:16 Section 1 CC). Unless the members of the management board can prove that they cannot be blamed for not meeting their obligations, each member will be personally, jointly and severally liable for said deficit. A claim based on Article 2:16 CC can only be instituted by the bankruptcy trustee.

Karel Frielink
Attorney (Lawyer) / Partner

(10 August 2015)


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