How Can Shareholders’ Agreements Shape Corporate Governance and Directors’ Liability?

Abstract

The interplay between contract and state corporate law in shaping corporate governance is not a novelty. In this article author questions the impact of private ordering through the shareholders' agreement (further in text: SA) on corporate governance and possibly on the director's duties and liabilities. The author argues that the SA might have far-reaching consequences for all the stakeholders and third persons as there are only a few limitations to its content, mainly referring to the mandatory rules of corporate law and general limitations of contract law. It means shareholders can impose additional rules for governance to directors, for transfer of shares, employment policy, and others. The author shall question whether SA can modify the articles of association. This article aims to reassess the balance between corporate and contract law instruments for the companies' governance. The author argues that analyzing corporate governance without considering contractual tools, such as SA, becomes incomplete and seriously undermines rethinking fundamental principles of corporate governance, such as the issue of directors' liability.