Mistakes of Board of Directors' Members in a Joint-Stock Company: A Comparative Study

Abstract

This study examined the issue of mistakes made by members of the board of directors in public joint-stock companies, in a comparative study, in light of the transformations taking place at the local, regional, and global levels, and the growing role of companies in influencing national and global economies, in addition to the increasing expansion of the activities of international organizations specialized in commercial affairs. These factors and their implications for local legal entities, their ability to develop their economic and administrative activities, and their ability to adapt them to market requirements and needs have resulted in many mistakes from the boards responsible for managing such companies. Given the legal nature of public joint-stock companies and the size of the activities they undertake, they are more exposed to such mistakes. Therefore, it has become necessary for the legislator to keep pace with modern developments and establish legal guarantees capable of protecting all parties dealing with these companies. The research aims to study and regulate the relationship between the board of directors of the company, by addressing the subject in detail and identifying the mistakes committed by the board and their effects on the company and others, in addition to clarifying both civil and criminal liability within the framework of the public joint-stock company. At the end of the research, a set of findings was reached, the most important of which is that members of the board of directors are responsible towards the company and the shareholders for damages arising from violations of the provisions of the law, or from mistakes or negligence in their duties. The study also concluded with many recommendations, the most important of which is the hope that the legislator would intensify penalties and strengthen civil obligations on managers and board members.