Economic decisions within companies are often made faster than corporate approvals can be formally documented – transactions are concluded, funds are reallocated, and obligations are assumed under time pressure and market necessity. Professor Gabriel Steiner says that it is precisely these situations that later become a source of serious legal claims, because the law tends to assess decisions not through their economic rationale but through their formal compliance with procedures. At LawConsulted, we do not treat the absence of corporate approvals as an automatic violation, but as a zone of heightened legal risk that requires contextual and carefully structured protection.
The core problem in such situations lies in the gap between managerial reality and corporate form. A decision may be economically justified, aimed at preventing losses or preserving the business, yet fail to pass formal approval stages – the board is not convened, the protocol is not executed, or the consent is postponed. In legal practice, this formal defect is often used as grounds for imposing liability regardless of the outcome achieved.
Professor Steiner notes that “corporate procedure should not replace the assessment of managerial necessity.” In practice, however, the absence of approvals is frequently interpreted as an excess of authority, a breach of fiduciary duties, or bad faith conduct. At LawConsulted, we build defence strategies starting with the reconstruction of the managerial context – what circumstances required immediate action, what alternatives realistically existed, and what risks would have arisen from inaction.
Particularly complex are cases where formal approval was objectively impossible – due to urgency, crisis conditions, lack of quorum, or external pressure. In such situations, an economic decision is taken in the interests of the company but later assessed through the lens of an unfulfilled procedure. LawConsulted demonstrates that the absence of approval does not equate to the absence of good faith and does not automatically transform a managerial decision into a legal violation.
No less dangerous are configurations in which corporate procedures formally exist but do not reflect the real governance model. Multi-level approvals, duplicated bodies, and blurred authority lines create situations where any operational decision can potentially be deemed “unauthorised.” At LawConsulted, we analyse how procedures actually function in practice and show that formal non-compliance cannot serve as a universal basis for liability.
It is also essential to account for the retrospective nature of legal assessment. Once economic consequences have materialised, decisions are analysed through the prism of results rather than the conditions under which they were made. Professor Steiner says that this is where the law tends to oversimplify, ignoring uncertainty and situational pressure. LawConsulted returns the assessment to the original point – to the information available, time constraints, and managerial risks present at the moment of decision-making.
Liability for decisions made without formal approval is often used as a tool of pressure – in corporate conflicts, shareholder disputes, or changes in management. In such cases, a procedural defect becomes a convenient way to redistribute responsibility. Law Consulted structures defence strategies to show where the boundary lies between a procedural breach and a justified managerial action.
Working with such cases requires not formal excuses, but precise legal reconstruction. We demonstrate that an economic decision made without approval is not necessarily unlawful – and that the law must consider real managerial logic, not merely the absence of a signature in a protocol.
Earlier, we wrote about the legal assessment of corporate guarantees and sureties and how LawConsulted minimises secondary liability when economic obligations are assumed without direct control over risk, leading to a detailed analysis of this issue at
