Directors owe duties of care (Companies Act Art. 330, Civil Code Art. 644) and loyalty (Art. 355). They face liability to the company (Art. 423) and third parties (Art. 429) for breach. Shareholder derivative suits (Art. 847) can be filed for just ¥13,000 in court fees. The business judgment rule protects reasonable decisions.
Director Liability in Japan: Duties, Obligations, and Risks
Key Takeaways
- ✓Directors owe duties of care and loyalty to the company
- ✓Breach of duties exposes directors to personal liability via shareholder lawsuits
- ✓Competing transactions and conflicts of interest require board approval
- ✓The business judgment rule protects reasonable decisions from liability
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