AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
fil its duties. All relevant documents (eg, share purchase agreements and shareholders’ agree - ments) must be fully disclosed to the Takeover Commission. However, the bidder or the party obliged may only disclose extracts of certain documents if the bidder or the party obliged has an interest in ensuring that information is kept secret. There is no disclosure requirement vis- à-vis the recipients of the takeover offer.
• must respond to the bid by way of a state - ment. Nevertheless, searching for “white knight” to make a competing offer is permitted. 8.2 Special or Ad Hoc Committees In Austria, it is not common for managing boards to establish special or ad hoc committees in business combinations or in cases of conflict of interest. Usually, conflicted members abstain from the vote, do not participate in the meet - ing, or are not granted access to information on those items in relation to which the conflict exists. Depending on the corporate governance, direc - tors’ conflicts of interest may also be addressed to an existing supervisory board that has, among other things, some intermediary role between the managing board and the shareholders and that represents the company in dealings with directors. Note that on the level of supervisory boards, specific committees (eg, audit commit - tees) may have to be established, depending on the size of the company. 8.3 Business Judgement Rule In Austria, courts defer to the judgement of managing directors according to the Business Judgement Rule, which applies to any business decisions of board members regardless of the business situation. The Business Judgement Rule, as it is understood in Austria, establishes “safe harbour” with regard to decisions of board members, provided that: • a business decision is made; • the board members act free from conflicts of interest; • the decision is based on all information rea - sonably available; and
8. Duties of Directors 8.1 Principal Directors’ Duties
A two-tier board system governs Austrian stock corporations. The members of both boards – the management board and supervisory board – are required to comply with the duty of care of a prudent business person and to act foremost in the company’s best interest. Additionally (but only of secondary importance), shareholders’, employees’ and public interests may be taken into consideration. Besides that, Section 47a of the Austrian Stock Corporation Act lays down a general principle of equal treatment for all shareholders. Similar duties of care and loyalty towards the company apply to the managing directors of limited liability companies. The Austrian Takeover Act also requires manag - ing directors and members of the supervisory board to act in the interest of all shareholders, employees, creditors and the general public and to remain objective during the takeover proce - dure. As soon as the intention to launch a bid has been announced (respectively, the members of the boards have knowledge of the intention to launch a bid), the boards: • must not prevent the public bid; • must stay objective; and
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