If you are a board member, the Supreme Court’s decision from the summer of 2025 is relevant to you.

 

The case before the Supreme Court concerned a construction company that received approximately NOK 13 million under an on-demand guarantee shortly before bankruptcy. The chair of the board and the general manager disposed of the funds. The question was whether the chair of the board could be held personally liable in damages.

 

The Supreme Court held that unlawfulness or disloyalty had to be present in order for board liability to arise, and in the specific case there was neither unlawfulness nor disloyalty, even though the company later went bankrupt.

 

The decision has significance beyond the specific case:

• first, the judgment clarifies that board liability does not arise automatically in connection with risky transactions or bankruptcy

• board members gain a certain degree of reassurance that liability requires more than unfortunate outcomes – there must be culpable conduct

• finally, the Supreme Court sets a relatively high threshold for imposing personal liability on board members.