https://youtu.be/mRigydijT7I
The book *250 Questions on the Liability of Directors and Managers* offers an academic and practical approach to the legal liability of directors and managers in various areas of corporate management.
Presenters included Dr. Carla Arellano—Regional Compliance Counsel (Uruguay, Bolivia, and Paraguay) at FERRERE Abogados—, Dr. Alberto Baroffio—Partner at FERRERE Abogados—, Dr. Martín Fridman—Senior Attorney in the Litigation and Arbitration Department at FERRERE Abogados and lecturer at ORT—, Dr. Gianni Gutiérrez—managing partner of the Tax Department at FERRERE Abogados and professor at ORT—and Dr. Carolina Piacenza Araujo—senior attorney at FERRERE Abogados and professor at ORT—.
The book launch took place on Friday, November 18, in a hybrid format: some participants attended in person at the Pocitos Campus of Universidad ORT Uruguay others joined online via HyFlex®.
Mauricio Oppenheimer, M.A.—an independent board director and former general manager of Punta Carretas Shopping—moderated the event.
Oppenheimer congratulated the book’s authors. “It was a pleasant surprise to be able to read through it, enjoy it, and learn from it. Those of us who serve on corporate boards often ask ourselves these kinds of questions. I believe you are making a very important contribution to helping directors and managers truly understand the challenges we face in our professional lives.”
Gutiérrez then thanked everyone who, in one way or another, contributed to the book.
The Legal Impact of Directors
The event moderator noted that, in addition to the board members, there is often an advisory board whose members make decisions but are not formal board members or representatives of the company. “The question for you is: Do they have the same responsibilities? Do formal board members have the same legal standing as an advisory board?”
Gutiérrez said, “Whether or not he is involved in the decisions, regardless of his conduct, the director will be held responsible.”
“First, I’d like to emphasize when liability applies,” Piacenza added. “Not just anyone will be held liable for their actions. There must be actual harm, and it must have been caused by the director in question. If he is held liable for poor performance in his role, that is when we will assess whether he acted in good faith or not.”
Arellano added: “When it comes to corruption, one is held accountable for one’s involvement, not for the specific position one holds within the company. The CEO must review which Uruguayan and foreign anti-corruption laws apply, as this will determine his or her liability and any potential penalties.”
Baroffio, for his part, stated that from an employment standpoint, members of the advisory board could indeed be held liable under certain circumstances.
“The rulings focus specifically on whether the director was acting within the scope of their duties or whether they occasionally assumed the powers of an owner. They also take into account whether the employees were clear about who the actual employer was. I believe the conduct of any director or any other person within the company is important.”
Conflict of interest
“How should a director act when there is a conflict of interest?” asked Oppenheimer.
Fridman replied that, when a company is facing financial difficulties, the CEO may want to make a decision that differs from other perspectives within the company.
“When a company cannot meet its obligations due to a lack of liquidity, I believe it should file for bankruptcy. This is often seen as the end of the company, but today’s regulations aim to reshape the bankruptcy process and provide support to help the company emerge from that situation. The Bankruptcy Law offers a tool for dealing with these types of situations.”
Personal limits
Oppenheimer also asked about the personal limits of directors’ liability. “In other words, sometimes when we step down from a position on a company’s board, we wonder how long we remain liable for the decisions we made while we were active directors.”
“The director’s liability is assessed for up to two years retroactively. Within those two years, there may be directors who are no longer with the company and who are summoned to assess their liability in the proceedings,” Fridman replied, concluding: “It may be that I no longer have anything to do with the company—that I was a shareholder, sold my stake—but still have to participate in bankruptcy proceedings for a company of which I am no longer a part.”