Ar vakaru valstybiu teiseje valdymo organams nustatyti rupestingumo pareigos (duty of care) principai ir standartai taikytini Lietuvos bendroviu ...
Whether director's duty of care principles and standards established in western law systems are applicable in Lithuanian corporate law?

Summary/Abstract: Corporations law has been developing very intensively during the last century. Since the core of corporations law is the duty of care, this concept has also been evolving. However, the relative lack of Lithuanian case law on the Corporations Act provisions means that some uncertainties about duty of care operation in Lithuanian law remain. The situation regarding western law systems is different. The purpose of this thesis was to identify similarities between the director’s duty of care principles in Lithuanian and western law systems and use them as persuasive arguments in interpreting Lithuanian legal concepts. Within the scope of this work comparative analysis of the duty of care as a part of fiduciary duty was performed. As standards for conduct and standards for judicial review were compared, the main principles of the duty of care in both Lithuanian and western legal systems were found to be similar, since the objective reasonable person standard and the subjective good faith standard for corporate directors are applied in both systems. However, some differences were found regarding principles of the business judgment rule. Although legal provisions stated in the Lithuanian Companies Act appear to be very similar to the business judgment rule, since the main requirements are that directors act honestly and with due care or be properly informed, the differences between these legal concepts are substantial. The business judgment rule is the product of judicial development. In contrast, the Corporations Act exemptions are purely statutory. Under the Lithuanian law the director’s conduct not only has to comply with the duty of care; in addition, directors have the burden of proof to show that they in fact exercised due care. Thus, the Lithuanian Companies Act presents an ideal opportunity for Lithuanian courts and law specialists to fill in the obvious gaps in the field of protection of company directors from harsh statutory liabilities. There are ample possibil

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