Personal liability risks for top managers are rapidly intensifying. The economic environment requires businesses to take bespoke and often risky decisions that may inflict losses on the company, resulting in lawsuits against management. Commercial courts annually handle around a thousand claims for recovering losses from business executives and uphold almost half of them, exposing not only directors but also shareholders, board members, beneficiaries and managing organisations to potential legal liability. Corporate losses can be recovered from management even without bankruptcy proceedings: for any actions recognised as made in bad faith or unreasonable, from entering into a transaction and rewarding an officer to starting a new line of business. A lawsuit can be filed by the company itself (through its director), its members and shareholders (in a joint-stock company, those holding at least 1% of the voting shares) and directors who are board members. Action is often initiated by newly hired managers.
Changes to ownership and management structure linked to sanctions or new shareholders and investors further active development of defence mechanisms for directors: liability limitation and insurance agreements.
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