1. September 2022

The board’s responsibility in troubled times

In troubled times with war, rising interest rates and high raw material and energy prices, the companies’ financial position can be challenged. It is therefore important that the board acts actively and fulfills its duties, both to avoid own liability for damages and, in the extreme, that the company goes bankrupt.

The board’s role in troubled times

The acute effects of the Covid 19 pandemic seem to have subsided in Norway, but they have been replaced by the war in Ukraine and large costs for raw materials, energy and logistics, and not least delays with subcontractors abroad. In such troubled times, it is important that the company’s board closely monitors the development of the company’s equity and liquidity, and takes the necessary measures at the right time. If the board does not succeed in this, the company may ultimately go bankrupt, and the board members may be held liable for damages.