SERBIA Law and Practice Contributed by: Nataša Lalović Marić, Jovan Mićović and Stefan Šilobad, Law Office Miroslav Stojanović in cooperation with Wolf Theiss
8. Duties of Directors 8.1 Principal Directors’ Duties
8.2 Special or Ad Hoc Committees The board of directors (BoD) of a non-public joint stock company may form committees that would assist the BoD in fulfilling its responsibilities. In public joint stock companies, the BoD must form an audit committee and may form committees for appointments and com - pensations, and other committees in accordance with the company’s articles of association. The competencies of the BoD cannot be delegated to a committee. Accordingly, committees cannot be used when some directors have a conflict of interest, except to operationally support the BoD by, inter alia, A director must carry out their duties in good faith, with due diligence, showing the care of a prudent businessperson, and with a reasonable belief that they are acting in the company’s best interests. If a director has certain specific knowledge, skills or experience, such shall be taken into account for the purpose of evaluating the level of diligence that is reasonably expected of such director. A director may also base their decisions on information and opinions provided by persons who are specialised in a specific field (law - yers, tax consultants, etc) if the director reasonably believes that they acted diligently in a specific matter. A director who proves that they acted in accordance with these standards shall not be liable for damages incurred by the company. 8.4 Independent Outside Advice Independent outside advice is commonly given to directors in the form of expert opinions or reports issued by financial, legal, tax and technical experts. 8.5 Conflicts of Interest The company may file a lawsuit against a director who breached his/her duty to avoid conflicts of interest (see 8.1 Principal Directors’ Duties ) and also against the director’s related parties, and may: • claim damages; and/or • seek a transfer of all benefits gained as a result of such breach of duty from the managing director or a related party. providing opinions and proposals. 8.3 Business Judgement Rule
A director of a Serbian company is in charge of man - aging the day-to-day operations of the company and representing the company before third parties in accordance with the articles of incorporation of the company and the shareholders’ assembly decisions. The specific fiduciary duties of a director are as fol - lows. • Duty of care – a director must carry out their duties in good faith, with due diligence, showing the care of a prudent businessperson, with a reasonable belief that they are acting in the company’s best interest. • Duty related to transactions involving personal interest – a director must notify other managing directors or the supervisory board of their personal interest (or an interest of the director’s related party) in any transaction entered into or any action taken by the company. • Duty of avoiding conflict of interest – a director cannot, for their own benefit or for the benefit of any related party: (a) use any of the company’s assets; (b) use any information obtained in the capacity of a director, unless such information is otherwise publicly available; (c) abuse their position within the company; or (d) use the opportunities that arise for the com - pany for their own benefit. • Duty of confidentiality – a director should keep business secrets of the company confidential. • Duty of non-competition – a director should not, directly or indirectly, enter into a relationship with a competitor of the company, unless such rela - tionship has been approved by the company (in a procedure for approval of transactions involving personal interest). Additional obligations of a director may be determined by the articles of incorporation of a company or share - holders’ assembly decisions, and in the agreements concluded between the company and a director.
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