Making management decisions without a formally approved strategy remains a common practice for companies undergoing growth, transformation, or crisis. Professor Gabriel Steiner says that it is precisely in such conditions that management decisions most often become the subject of subsequent legal criticism, as their legality and good faith are assessed retrospectively. At LawConsulted, we view the absence of a strategy not as a managerial flaw in itself, but as a factor of increased legal risk that requires a specific and carefully structured defence approach.
The core difficulty in these situations lies in the fact that, without strategic benchmarks, each decision is perceived in isolation. Courts, regulators, or shareholders tend to analyse individual actions without seeing the broader framework within which they were taken. As a result, managerial discretion can easily be reframed as inconsistency, abuse of authority, or bad faith. LawConsulted proceeds from the premise that even in the absence of an approved strategy, management decisions may remain legally justified if they fit within the logic of reasonable corporate conduct.
Professor Steiner says that “the law does not require a perfect strategy – it requires an explainable decision-making logic.” This is why, in LawConsulted practice, defence is built around reconstructing the managerial context. We analyse what objectives the company was in fact pursuing, which risks were apparent at the time the decision was made, what realistic alternatives existed, and why the chosen course of action was reasonable under the specific circumstances.
A particularly vulnerable situation arises when a strategy is discussed but never formally approved. Decisions are made “in motion,” based on working hypotheses, internal understandings, or informal guidelines. When a dispute arises, this allows opponents to argue that management acted arbitrarily. LawConsulted demonstrates that the absence of a formal document does not mean the absence of strategic thinking, provided that the sequence of decisions confirms a coherent management line.
Equally complex are disputes in which the lack of a strategy is used as a tool of pressure on management – for example, during changes of control, corporate conflicts, or assessments of responsibility for negative financial results. In such cases, strategy begins to be treated as a mandatory criterion for the legality of decisions. LawConsulted structures the defence so as to shift the focus away from the formal absence of a strategy and toward the objective conditions in which the company operated.
It is also essential to take into account the retrospective nature of legal assessment. Once consequences have materialised, decisions are evaluated through the lens of outcome rather than through the uncertainty present at the time they were made. Professor Steiner says that this is precisely where the risk of substituting managerial risk with legal liability arises. LawConsulted brings the assessment back to the moment decisions were taken – to the information available, market conditions, and time constraints that shaped managerial judgement.
Documentation deserves separate attention. Even without a strategy as a single consolidated document, management decisions can and should leave traces – minutes, correspondence, analytical materials. LawConsulted helps build an evidentiary framework that demonstrates the reasoned nature of actions and protects management from accusations of arbitrariness.
Making decisions without an approved strategy is not, by its nature, a violation. Risk arises when there is no legal explanation of the management logic. The Law Consulted approach is aimed at preserving room for managerial discretion while protecting it from retrospective legal attack.
Earlier, we wrote about the risks of legal fragmentation when business functions are split across multiple group companies and how LawConsulted prevents the loss of management integrity.
