Siemens Bribery Case: Liability Of Board Members

The Munich District Court N° I has decided that each individual board member (Vorstandsmitglied) has to ensure that his company is organized and monitored in such a way that no violations of the law take place.

Such organization duty is only sufficient once a compliance organization is established which ensures loss prevention and risk control. Crucial for the scope of the organization is the type, size and structure of the company. The establishment of a functioning compliance system is part of the overall responsibility of the board (Vorstand).

In the case at hand, the board member had been responsible for the corporate finance and legal department, and is accused of not having implemented effective measures against bribe payments despite having knowledge of such bribes being paid abroad.