LIECHTENSTEIN Law and Practice Contributed by: Alexander Appel, Andreas Schurti and Hemma Kohlfürst, Schurti Partners Attorneys at Law Ltd
concerned will be an obligation to pay damages. For board members of regulated companies, additional sanctions may apply. To the extent the breach also qualifies as a crime under the Liechtenstein Criminal Code, the sanctions can also include fines and impris - onment. Liechtenstein law provides for the personal liability of board members in the event they have infringed their legal obligations and duties. For such liability, not only must damage be proven, but also that the board member acted intentionally or negligently, and that such conduct caused the damage. The liability of various board members is joint and several in nature. Board members are liable for their wilful or intention - al misconduct, and for their negligence. If a board member is liable for damages, the legal entity can only assert such damages against them if the board member has not been released from liability due to a discharge resolved by the shareholder meeting. If the corporation has no claim for damages, it is possible that the shareholders can directly enforce their claim for damages against board members. 3.9 Other Claims/Enforcement Against Directors/Officers It is common for board members and/or members of the management of larger corporations to be insured under D&O insurance. In this context, it is accept - able that the company pays the insurance premium for board members and members of the management. However, it would not be compatible with the law if the company accepted an obligation to indemnify board members and members of the management against any and all liabilities that they incur towards the com - pany or its shareholders. Nonetheless, it is possible for a company to agree to such indemnity in a specific case/lawsuit. 3.10 Payments to Directors/Officers The approvals required depend on the size of the company. For smaller companies, there are no major statutory law restrictions, but market practice will fre - quently set the limits for remuneration/fee amounts. Conversely, for public companies, a number of statu - tory law restrictions exist under the PCA and certain regulatory laws. The latter, however, apply only to the
regulated companies concerned, such as banks or insurers. For listed companies, shareholder approval may be required for the remuneration of board mem- bers and members of the management. In addition, Liechtenstein banks and insurers are required by law to institute a separate committee within their board of directors, which also examines the lawfulness and adequacy of payments/remuneration payable to the directors and officers within that bank/insurer. Publicly traded companies must disclose this infor - mation in their annual report. For regulated compa - nies, such as banks and insurers, additional specific requirements exist in this regard (also regarding the structure and degree of detail for such disclosure). Under Liechtenstein law, shareholders do not owe any duty of care, loyalty or any other duty to the corpora - tion. This principle applies to both minority and major - ity shareholders in their capacity as shareholders. Conversely, shareholders, in proportion with their voting powers, can influence the key decisions to be taken in relation to corporate governance issues at the level of the shareholder meeting. In this regard, their voting rights can prove a useful tool to super - vise and influence the board of directors and its strat - egy. However, under Liechtenstein law, a shareholder is required neither to participate in the shareholder meeting nor to exercise his or her voting right on any agenda item of such meeting. Depending on the scope of their participation, share - holders are subject to certain statutory disclosure requirements as regards their shareholdings. Such obligations apply to shareholders of listed corpora - tions or companies that are regulated and under the supervision of the Liechtenstein FMA. 4.2 Role of Shareholders Liechtenstein law does not impose on the sharehold - ers of a Liechtenstein company any duty or obligation except the obligation to pay up the shares that they subscribed. In particular, the shareholders do not owe 4. Shareholders 4.1 Companies and Shareholders
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