Managers have enormous responsibility to their company, shareholders, banks and other third parties (“stakeholders”). If they fail to meet these responsibilities (adequately), leading to financial damage, then they must personally provide compensation (“manager liability”). Continuously more stringent liability provisions and an aggressive claims mentality mean that several thousand compensation claims are made against company executives each year in Germany alone.
Irrespective of a civil law suit (or even in advance of such a suit) managers have to deal with criminal prosecutions or associated investigations, e.g. if they are accused of breach of trust.