Modification of the Duty of Loyalty and the Duty of Care and the Consequences of Their Breach by Members of Elective Bodies of Stock Companies

There are two leading duties that react to the agency problem in the corporate regulation – duty of loyalty and duty of care. The purpose of this paper is to answer the question whether, under what circumstances and on what grounds, it would be permissible to modify the two general duties either on the basis of an exception presumed by the law, or upon an agreement between a company and its director. With this purpose in mind, the authors analyse the respective legal regulation in three countries, namely Germany, Great Britain and the Czech Republic. While the modification of obligatory loyalty has been understood by the analysed legal systems within certain boundaries, they deal with the decreasing of the standard of care in a more positive way, whether through a direct modification of the standard of care or indirect modification through determining the role of an elective body member.