Bestyrelsens erstatningsansvar i danske pengeinstitutter

Simone Vesterager Boksa & Line Mølgaard Henriksen

Student thesis: Master thesis


The purpose of this master thesis is, to define the liability norm for members of the board of directors in Danish banks. To define this, we have used legislation, case law, tradition of culture and soft law. In Denmark the liability for tort regarding board of directors, is called Culpa. Culpa means that the members will be held liable for a damage, if they have made an unlawful act or omission and if the condition for compensation is satisfied. The laws contain rules about the members of the board and about their tasks and duties. The laws contain quite a few normative expressions, why it is often up to the court to interpret the legislation further. Case law is essential to help define the norm and the required level of due care in order to avoid liability. For further guidance we have analysed soft law and legal investigations by lawyers of failed banks. The business judgment rule is made so the members of the board will not be held liable if they have made well-informed decisions in god faith. This rule is found efficient since it helps minimise the risk of overcautious board members. The analysis shows that there were several problems in the Danish banks, and that the members of the board in several cases could be held liable for damages. We have pointed out the following problems with the board of directors: lack of competences, opportunistic behaviour (members following own interests), optimism regarding the future and fear of alienating the executive board members. It has been discussed if a stricter standard of conduct could solve some of the problems. It is not found Kaldor Hicks efficient to make the liability stricter because of the risk of too much caution, where the board members don’t dare to invest. Culpa is found to be the most efficient solution for board members negligence. In order to avoid similar problems with the board of directors in the future, alternative solutions have been discussed. One solution could be to prohibit incentive payments. Another possibility is to prohibit restrictions on voting and ownership. This can help minimise the free-rider problems because, major shareholders often will have more initiative to monitor and discipline the board members. Third possibility is to require a professional board of directors, which should be based on higher level of competences. Finally, it is a solution to increase the penalty on criminal justice as a deterrent mechanism.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2014
Number of pages139