Report on the Conference ‘Boards Inc – Legal Persons as Directors and Officers’

The permissibility of legal persons serving as directors and officers of another legal person has long been debated in corporate law and assumes particular relevance from a comparative perspective due to fundamentally different regulatory strategies of national legislators. Against this background, the conference ‘Boards Inc. – Legal Persons as Directors and Officers’, held on 11 December 2025 at the Centre for Comparative Corporate Finance Law (C3FL) at the University of Vienna, provided a forum for examining the concept of incorporated boards. The conference aimed to critically assess these divergent approaches, to synthesize economically and legally sound solutions and to explore options for corporate law reforms. Following the welcome addresses by Brigitta Zöchling-Jud and Chris Thomale, the conference first addressed the economic rationale for permitting incorporated boards.

The Economic Case for Incorporated Boards

In the conference’s keynote address, M. Todd Henderson challenged the natural-person requirement for board membership and introduced the concept of firms providing board services. Drawing on his prior research with Stephen Bainbridge, he highlighted several benefits associated with using such ‘board services providers’ (BSPs), particularly in terms of improving accountability and transparency within corporate governance (Bainbridge & Henderson 2014; Bainbridge & Henderson 2018). Henderson further argued that appointing a BSP as a company’s entire board could stimulate competition and foster a market for high-quality board services.

Erich Schanze then offered a broader critique of traditional corporate law narratives, arguing that assumptions about the inherently ‘personal’ nature of incorporated entities are largely misleading. From an economic perspective, he framed the appointment of board members as a ‘make-or-buy’ decision, which should include the option of ‘buying direction’ through BSPs. At the same time, Schanze cautioned against the unrestricted use of BSPs, emphasizing the continuing importance of concerns over personal reputational loss for natural persons acting as directors. The panel then concluded with an insightful discussion on ‘self-driving boards’ chaired by Christiane Wendehorst.

Regulatory Fragmentation in the Legal Treatment of BSPs

1. Absence of BSPs in German-Speaking Jurisdictions

Under the chairmanship of Walter Doralt, the conference’s second session turned to the predominantly restrictive approaches in German-speaking jurisdictions. Johannes W. Flume first provided a historical analysis of German and Austrian corporate law, which have emphasized the human factor in corporate governance since the enactment of the German Stock Corporation Act of 1937. Flume elaborated on the impact of the Führerprinzip on the historical regulatory mindset, alongside the intellectual legacy of Friedrich Carl von Savigny and Otto von Gierke. 

Challenging the view that the natural-person requirement has been historically mandated and doctrinally stable, Sebastian Mock identified growing signs of disintegration within German and Austrian corporate law. In particular, he highlighted statutory provisions that permit legal persons to assume core functions within corporate governance. According to Mock, these inconsistencies within the current restrictive framework warrant renewed discussions on the broader introduction of incorporated directors.

Concluding this session, Rolf Sethe compared the approaches taken in Switzerland and Liechtenstein, which — despite the overall similarity of their legal systems — have evolved in different directions. Whereas recent reforms in Swiss law have partially relaxed the former blanket prohibition of incorporated directors, resulting in a relatively complex regulatory framework, Sethe noted that Liechtenstein has adopted a simpler and more permissive approach regarding such board structures.

2. Using and Abusing BSPs in South-Western Europe

The conference’s third session, chaired by Giovanni Strampelli, examined more liberal frameworks in Europe. Loes Lennarts first reported on the permissive framework in the Netherlands by highlighting concerns regarding limited transparency, risks of abuse, and legal challenges in piercing foreign incorporated directors. Despite these shortcomings, Lennarts noted that a prohibition of (foreign) incorporated directors might conflict with the freedom of contract and the freedom of establishment.

Pierre-Henri Conac subsequently examined the approaches adopted in France and Luxembourg, focusing on the role of the permanent representative — a natural person appointed to act on behalf of the incorporated director — to mitigate the potential for abuse. Conac emphasized the historical importance of corporate groups as a key driver behind the recognition of incorporated directors and suggested that the availability of such board structures could be addressed through harmonization at an EU level via the 28th regime. 

Lastly, Paula del Val Talens discussed recent developments in the approaches of Italy and Spain, which — despite similar historical starting points — have evolved in divergent directions due to their respective emphasis on either organizational or liability considerations. Del Val Talens noted that the permissibility of incorporated directors is contingent upon the chosen legal form and explored the recognition of legal persons as de facto directors and shadow directors in both jurisdictions.

3. The Mixed Legacy of BSPs in Common Law Countries and Beyond

In its fourth session, chaired by Jason Harris, the conference compared restrictive and permissive approaches to incorporated directors while addressing recent regulatory shifts. Eva Micheler first reported on the framework in the United Kingdom, which had historically permitted incorporated directors but has recently undergone significant changes. In particular, Micheler highlighted concerns regarding limited transparency and accountability as key drivers behind the prohibition of incorporated board structures. Micheler concluded by outlining current reform initiatives requiring all directors to be natural persons with verified identities and thereby establishing an even stricter regime. 

Building on the historical connection to British corporate law, Antigoni Alexandropoulou examined the current regulatory framework in Cyprus, which — unlike the UK — continues to permit incorporated directors. In that regard, Alexandropoulou emphasized the broad definition of the term ‘director’, which also encompasses de facto directors and shadow directors, while noting certain safeguards within the otherwise permissive approach. 

Kerem Çelikboya then discussed the Turkish approach, which has moved away from its historically German-inspired model and has gradually evolved into a more liberal regime permitting incorporated directors. Notably, Çelikboya observed that — contrary to the considerations behind the regulatory changes in the UK — this reform has contributed to mitigating ‘liability gaps’ while substantially enhancing transparency and accountability in corporate governance.

Conclusion

Whereas economic considerations predominantly support the permission of BSPs, the conference’s comparative legal analyses and practical observations on the operation of such corporate governance structures revealed significant challenges. The complexity of adequately implementing incorporated boards has led many national legislators to proceed cautiously, with some jurisdictions refraining from adopting BSPs or reversing previously permissive regulations. Policy choices thus continue to reflect entrenched legal traditions and broader corporate law frameworks, resulting in divergent outcomes and ultimately precluding a standardized ‘one-size-fits-all’ solution for incorporated directors.

Outlook

While the recordings of the individual presentations are already available online, the speakers’ detailed contributions will be published in a conference volume later this year by Verlag Österreich.

Manuel Dachs is a Research Assistant, Department of Commercial and Business Law, and Fellow, Centre for Comparative Corporate Finance Law (C3FL), University of Vienna.

Tankred Dünser is a Student Assistant, Centre for Comparative Corporate Finance Law (C3FL), University of Vienna.