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[Aktiengesell…] schaften in accordance with the new corporation
law (Walter de Gruyter & Co., 1938)
(5) contributed to the
commentary by the members of the Reichsgericht on the corporation law, dated 31
January 1937 (Walter de Gruyter & Co., 1939).
In this commentary I
wrote, among other things, the sections in part 4 entitled "Constitution of the
joint stock company" [Aktiengesellschaft], dealing with "Vorstand,
Aufsichtsrat, and Hauptversammlung [stockholder's meeting]." At present, I am
an attorney and notary public to the Berlin courts. |
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| Expert Legal Opinion |
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The opinion given on the question formulated above will be limited
to the responsibility of the Vorstand members under civil law. The answer to
the question under review is to be found in the cooperation act dated 30
January 1937 (Reich Law Gazette I, page 107).
It is laid down in
Article 70 of the corporation act that the Vorstand shall manage the affairs of
the company at its own responsibility. The law is therefore based on the
principle that the Vorstand as a whole shall be held responsible for the
conduct of the business of the company. A Vorstand consisting of several
members is, therefore, on principle, to be held jointly responsible.
This so-called collective management has been described as an absurdity
(Brodmann, German Commercial Code, art. 231, footnote 2), because it is
impossible for the whole Vorstand always to carry out the many individual
actions which make up the management of a firm. That is quite correct, but it
is no reason why the principle of collective management should not be
acknowledged. The task of the legal theorist as well as of the judge in court
merely consists in reducing that principle, in its application to practical
life, to its true proportions and, in particular, in limiting the
responsibility of individual Vorstand members to the extent to which they can
legitimately be made answerable. Legal theorists as well as judges in court
have paid due attention to that consideration.
The standard by which
the responsibility of the Vorstand members is judged is "the diligence of a
good and conscientious business manager" (art. 24, par. 1, corporation law).
The larger the enterprise and the more varied its activities, the greater is
the need to divide the duties of its Vorstand members according to location and
type of work. Were a Vorstand member to take upon himself the task of assisting
in all the business and administration of a firm, which would exceed the limits
of the ability and efficiency of any individual, the very fact of his taking on
such responsibility |
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