The purpose of directors' duties in the insolvency context: A critical assessment based on empirical data from Austria and Netherlands

Abstract

This paper examines the evolving discussions on directors’ duties in the insolvency context within the EU, particularly in light of recent harmonisation initiatives such as the 2019 Directive on Restructuring and Insolvency and the 2022 Proposal mandating a duty to file for insolvency. Using empirical data from Austria—a jurisdiction with a duty to file—and the Netherlands, which lacks this duty, the study investigates the potential impact and practicality of such requirements. Findings reveal that while Austria and the Netherlands have different frameworks, similar issues in enforcement and compliance emerge in both. These results suggest that imposing stricter or more explicit norms on directors across the EU may not effectively achieve policy goals, especially if financial constraints on enforcement remain unaddressed. We advocate for a policy approach that focuses on practical outcomes and enforcement capacity.