LIECHTENSTEIN Law and Practice Contributed by: Alexander Appel, Andreas Schurti and Hemma Kohlfürst, Schurti Partners Attorneys at Law Ltd
articles, a simple majority of the votes is required for such election. As far as the removal of members of the board of directors and the executive management is con - cerned, corporate decisions to remove such mem - bers are the exception rather than the rule. It is more common for a member to resign unilaterally or not to stand for re-election. In the vast majority of cases, the board of directors appoints the members of the executive manage - ment body. However, there are corporations that also require a shareholder vote for the appointment of such members. Under Liechtenstein law, there is no general obliga - tion for the board of directors to consist of more than one member. However, for corporations with nomi - nal share capital exceeding CHF1 million, the board of directors must consist of at least three members. Board members can either be individuals or legal enti - ties/corporate directors. For certain regulated com - panies (such as banks, insurers or asset managers), specific requirements apply pursuant to the pertinent legislation. It should be noted that the board of directors is free to organise itself within the ambit of statutory law. Consequently, the board of directors can also set up internal committees for specific purposes in order to enhance the corporate governance and organisation of the corporation. For corporations not subject to any licence require - ment to carry out their activities, the law requires that at least one board member must be a citizen of Switzerland or an EEA state – and in possession of a licence as a professional trustee or a licence pursuant to Article 180a of the PCA. 3.5 Independence of Directors In general, members of the board of directors are not under a statutory law requirement to be independent from any shareholder of the corporation. Nonetheless, the PCA contains specific rules regarding independ - ence requirements within the specific audit committee ( Prüfungsausschuss ): in a nutshell, these rules require
that the majority of the members of this committee must be independent of the corporation (including the chairperson of this committee). General company rules in the PCR further include mandatory requirements regarding the voting rights in matters or business transactions between the com - pany and him-/herself or a person close to him/her if such transaction results in a personal advantage for such board member. Furthermore, board members may not participate in any shareholder vote on their discharge. 3.6 Legal Duties of Directors/Officers Under Liechtenstein law, board members must act in accordance with the principles of the business judge - ment rule. In doing so, they must safeguard the best interests of the corporation and act on the basis of adequate information, without bias and free of any conflict of interests. They must also consider the interests of employees and other stakeholders. The general legal duties of the board members include their statutory duty of care and loyalty to the corpora - tion. Furthermore, the members of the board must treat the shareholders of the corporation equally in the same circumstances. These rules accordingly apply to members of the executive management body. 3.7 Responsibility/Accountability of Directors Under Liechtenstein law, the board of directors is responsible for ensuring sufficient corporate govern - ance. However, statutory law does not include explicit provisions that would constitute a specific legal obli - gation for the board in this regard. The law, however, contains various individual tasks that must be duly organised and complied with by the board of direc - tors. Such tasks pertain to the overall management, financial situation and organisation of the corporation, as well as supervision of the members of the man - agement body. The board must also ensure that the corporation’s financial documents are in line with the
applicable accounting standards. 3.8 Breach of Directors’ Duties
Depending on the claim at hand, the corporation itself or, alternatively, the creditors of the corporation, can enforce a breach of duties. If such breach can be proven, the main consequence for the board member
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