Legal Consequences of a Violation of Transactional Powers' Terms by a Company's CEO

The Master’s thesis addresses the legal consequences of a violation of transactional powers’ terms by a company’s CEO under Russian law. Imposition of different internal restrictions on a CEO’s powers either in the articles of incorporation or bylaws has become a widespread practice aimed to reduction of the risk of directors abusing the powers. The Russian legal doctrine unanimously assumes the legislative solution in its interpretation given by the Supreme Court is free of any shortcomings. However, such conclusion seems to be at least arguable: both voidability of a transaction beyond powers unless the other party has been acting in good faith and elimination of an obligation to make inquiries concerning the scope of directors’ powers without any exceptions are questionable. The policy and dogmatic grounds of the current Russian approach are analyzed in the thesis. Consideration is also given to the peculiarities of the case law and common practice accepted in most European jurisdictions to propose the directions for improvement. Keywords: chief executive officer, company, powers, authority, transaction, articles of incorporation, good faith, voidability, unauthorized agent