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Also, these policies have an effect
only if their breach can be appropriately
penalized. And if such a breach
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Most company law systems work by assuming that every |
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is committed and an assessment is to
be made on the appropriate legal consequences
, a key question is at which
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single legal entity is autonomous and managed by its |
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level of the chain of command that breach
occurred. This information is crucial
to establish the criminal and civil
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governing body appointed by its shareholders. In such a |
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law responsibility of the acting individual
( s) and possible employment-law
remedies against them.
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system, loyalties and reporting obligations of the acting |
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Clarity on the circumstances surrounding
the breach is important also for
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individuals will be directly owed to the very entities |
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the entity in question, in particular for
determining whether itself is contaminated
, i. e. can be held responsible for
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from which they derive their authorities. |
the breach. One important element of |
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the concerned entity’ s defense strategy
will be to demonstrate that the
breach was not the consequence of
an organizational failure( i. e. lack of
training or relaxed approach to legal
compliance) but can be explained as
the actions of one or a small group of
individuals. That defense can only be
credible made if( among other things)
the responsibilities and authorities
within that organization are clearly
allocated and such allocation is fully
reflected to the legal framework governing
that organization. Achieving this
level of clarity in groups is a challenging
task.
The three levels of responsibilities and authorities – Corporate authorities, Employee loyalties and Organizational lines From the perspective of the author,
responsibilities and authorities in an
entity are organized at three distinct
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management bodies, the delegations made by the same bodies, and extensions to other persons provided by special powers of attorneys. This is comparable to a“ web” of decision-making powers and signing authorities foreseen for the multitude of group companies under their respective local company laws, internal regulations, and trade registry entries. Most company law systems work by assuming that every single legal entity is autonomous and managed by its governing body appointed by its shareholders. In such a system, loyalties and reporting obligations of the acting individuals will be directly owed to the very entities from which they derive their authorities. Coming back to the allocation of responsibilities in a group, at the corporate level, the members of the governing body taking the decision, or the authorized signatories of a do- |
ledge of the documents they sign, and the decisions they“ approve” would be taken even before formal deliberations would be made. In practice when presented with a proposal, the acting persons would rarely scrutinize a motion in a manner the corporate laws assume they would do. They would lack the detailed knowledge of the factors surrounding the proposed action and often, their hierarchical / organizational status within the group would not foresee their intervention anyway. |
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levels:
The first one is the corporate( or
company law) level, that follows the
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cument would be the legal( nominal) originators of any action. But in reality, in many groups, these individuals would be sitting at several governing |
The second level consists of the responsibilities and loyalties created by employment contracts with the ma- |
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allocation of duties and authorities |
bodies across a multitude of jurisdic- |
nagement and personnel. One particu- |
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according to appointments made to |
tions, sometimes having limited know- |