Board Responsibility in Limited Companies: Duties and Personal Risk

The board is responsible for the management and oversight of the company. It must ensure sound organisation, stay informed about finances, and verify that operations, accounting, and asset management are conducted in a prudent manner.

The Board's Most Important Duties

The board sets plans and budgets to the necessary extent, monitors daily management, and addresses matters of an unusual nature or significant importance. Decisions should be documented through board minutes and a sound basis for decision-making.

The company must at all times have sound equity and liquidity based on its risk and scope. If the finances become unsound, the board has a duty to address the matter and propose measures according to the rules of the Limited Liability Companies Act (aksjeloven).

Can a Board Member Become Personally Liable?

A limited company (aksjeselskap – AS) has limited owner liability, but board members can incur liability for damages if they intentionally or negligently cause loss to the company, shareholders, or others. The assessment is specific to each case. Poor financial results alone do not automatically mean personal liability.

What Should the Board Do in Practice?

Regularly monitor liquidity, equity, tax (skatt), duties (avgift), and significant agreements. Request sufficient reporting, document questions and actions taken, and seek professional assistance when the situation requires it. Passivity in the face of serious problems can increase risk.

Board Data on Proffi

Proffi should display active and historical board appointments with dates and sources but not rank individuals' "responsibility" based on role alone. A board appointment is a matter of fact; potential legal liability requires a specific assessment.