One of the most discussed provisions of Austrian business criminal law is breach of fiduciary duty (Untreue) according to Art 153 StGB (Strafgesetzbuch – Austrian Criminal Code, StGB). This offence is committed by any person who knowingly abuses his or her authority (e.g. as managing director or authorized officer) to dispose of property of another person or to engage another person thus causing a financial detriment to the other person.
The perpetrator must act knowingly with regard to the abuse of authority, meaning that he/she knows for certain that in carrying out the action his/her authority to dispose of property is abused. Furthermore, he/she must act with at least conditional intent with regard to the damage of the principal, meaning that he/she was at least aware of a substantial risk that the damage will occur and, having regard to the circumstances, took the risk.
In cases in which the internal relationship between the principal and the alleged perpetrator contains certain restrictions (e.g. an obligation to obtain a permit in case of contract values beyond a certain threshold) it is rather easy to assess whether such restriction was violated and therefore the power to represent was abused. However, Art 153 does not only address cases in which internal restrictions were clearly agreed. In fact, numerous managing directors of companies are not bound to such restrictions in the internal relationship with the company. Furthermore abuse of power is obviously also possible in cases in which a certain threshold which triggers an obligation to obtain permission exists, but was not exceeded in the case at hand.
In this light the Austrian Supreme Court recently strengthened the principle that the managing director of a company is always bound to use his/her authority only for the benefit of the company and to protect the interests of the company with the diligence of a proper business man in order to avert damage (RIS-Justiz RS0131129).
For managing directors this shows that it is essential to comply with these principles which are in line with the business judgement rule, in order to avoid criminal liability.