Under Ethiopian company law, the company is a separate legal person—but that separation does not immunize directors and senior managers from liability for their own wrongdoing, or for breaches of statutory duties imposed on them as fiduciaries and gatekeepers.

People who control a company, be they directors, managers or controlling shareholders, may use their power to divert the company's wealth to unfairly enrich themselves or others.

Serving as a director of an Ethiopian company — whether a Share Company or a Private Limited Company — carries with it a range of legal duties and personal liabilities that many appointees, particularly those nominated by foreign parent companies, do not fully appreciate until a crisis arises.

The enactment of the Commercial Code of Ethiopia, Proclamation No. 1243/2021, represents the most significant overhaul of Ethiopian corporate law in more than sixty years.