On 18th September 2019 the Czech Supreme Court issued an important decision (case No. 27 Cdo 844/2018), addressing the issue of the violation of the obligation of the statutory body to act with the care of a diligent manager. In this particular case, the appointed director in question did not supervise sufficiently the activities of other executive director of the company, which led to the embezzlement of the company’s assets and damage to the company.
The Supreme Court came to the conclusion that if the executive is acting only formally, it must be concluded, as a general rule, that such executive is not acting with the care of a diligent manager and as a result he is liable for the damage caused to the company, jointly and severally with the other executive.
