Mirko Vasiljević
Dismissal of directors and members of the management of capital companies at any moment of time and when there are no reasons (grounds) or justified (serious) reasons for that i.e. “ad nutum” dismissal is a well-known institute of the comparative company law. However, the question remains whether such a dismissal by the appointing authority (assembly, supervisory board – depending on the management system: unicameral or bicameral) is accompanied by certain sanctions which, despite the acceptance of this institute, protect to a certain extent such dismissed directors or provide them with certain satisfaction.
In this paper, based on the analysis of comparative company regulations and relevant court practice, a critical view is given of the acceptance of this institute in its classic form (at any moment, without prior notice and deadline, without the right to compensation), which represents a great legal uncertainty. The author is of the opinion that this institute, although acceptable in principle for the private property of capital companies, must be accompanied by certain sanctions of a property nature (compensation for certain forms of property damage, as well as some forms of non-property damage, such as loss of reputation on the market), in accordance with concluded mutual agreement on services (management and representation) between the company and directors (especially independent and non-executive), as well as in some forms of employment contracts (especially related to the company and executive directors) which ensure employment security. However, the author is of the opinion that these forms of protection, in order to preserve the nature of this institute, cannot be such that their effect would be a deterrent for the company itself to make such decisions on „ad nutum“ dismissal.
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