Who could sue a director or officer?

The following stakeholders could hold the directors and offers of the company liable for bad decisions:

  • Shareholders, if the results of the business and hence the dividends or value of shares drop.
  • Creditors, if they are not paid.
  • Employees, if they were to lose their jobs.
  • Customers who are seriously prejudiced when the company no longer provides supplies vital to the customer’s business.
  • Suppliers, especially those who incurred considerable expense to supply the company.
  • The company itself – in the form of a derivative action
  • State authorities, who could bring criminal charges for negligently failing to take the required steps to prevent accidents, injuries, damage or harm to the environment.
  • Other parties who believe they have suffered a loss as a result of negligence.
Directors and Officers Liability