The managing director's separate exposure: what to do in the first ten days comes down to three actions: separate your paper trail from the board's minutes, put the board on written notice once insolvency risk is visible, and refuse verbal instructions that aren't confirmed in writing. Miss any of these and a contested decision reads as yours, not the board's.
Who this concerns
This applies to the person holding the formal office of managing director, verkställande direktör, in a Swedish limited company. It does not apply in the same way to a board member who has no operational role, and it does not disappear because the managing director also happens to be a shareholder. Swedish company law treats the managing director's function as a distinct executive office, separate from the board's collective duty of care. Where the same person sits in both roles, both exposures apply at once, and they do not merge into a single reduced risk.
The question tends to surface in three configurations. First, financial distress becomes visible before it becomes formal, and someone has to decide overnight whether the company keeps trading, keeps paying particular creditors, or stops. Second, a claim is being built against the board and the claimant's advisers are working out which individual actually signed, instructed and executed, rather than merely approved in principle. Third, a group restructuring moves real decision-making up to a foreign parent while leaving the Swedish subsidiary's managing director formally in place on paper, taking instructions informally rather than through the board. In each of these, the first ten days are the window in which the record is either built deliberately or allowed to form by default.
Where the parent company, the instructing shareholder or the counterparty to a disputed transaction sits outside Sweden, the substance of the exposure does not change, but its practical shape does. Instructions arriving informally from a foreign parent, without ever being adopted as a resolution by the Swedish board, do not transfer responsibility away from the managing director who acted on them; if anything, the absence of a board resolution makes the managing director's own written record more important, not less. Groups running cross-border service arrangements often carry a related layer of exposure through cross-border VAT treatment on intra-group services, which surfaces around the same distress events that trigger director-level questions and is worth checking at the same time rather than separately later. Anyone working through this from inside a Swedish subsidiary of a foreign group should also read the director liability practice overview before deciding how the ten days should be used.
What the law says
Under Swedish law as it currently stands, the managing director's duties are set out separately from the board's general duty of care and cover the day-to-day conduct of the business within the framework the board has decided. The managing director answers to the board for how that day-to-day conduct is carried out and can be held liable, independently of the board, where a decision inside that operational remit causes loss through negligence. That separation is exactly why the first ten days matter: what is written down inside that window becomes the record either that a contested decision was the managing director's own operational call, taken within the authority given, or that it was in fact made or ratified by the board and should be judged as a board decision instead.
A second point matters as much as the first: certain duties attach to the person holding the office of managing director personally, regardless of what the board resolves. Tax withholding and reporting obligations are the clearest example; a board resolution authorising a payment does not relieve the managing director of a personal reporting duty that sits on the office itself. Instructions from a majority shareholder, however forcefully given, do not substitute for a board resolution and do not shield the managing director who acted on them without one. Where the instructing shareholder is abroad and communicates informally, the absence of a formal instruction chain is not a defence; it is usually the opposite, because it leaves the managing director as the only person who made anything visible in writing.
How it works in practice
Day one: separate the file
The single most useful thing to do on day one is mechanical, not strategic: open a file that is yours, not the company's general correspondence, and start putting into it everything relevant to the decision or event in question, dated as it arrives. This is not about building a defence narrative yet; it is about making sure nothing gets lost inside the ordinary flow of company email before anyone has decided it matters. Anything reconstructed from memory three months later is worth less than anything captured on day one, however rough.
Day two to four: put it in writing
If insolvency risk, a disputed payment, or an instruction from a shareholder or parent is the trigger, the board needs to hear about it in writing inside this window, not in a corridor conversation that nobody minutes. A short written note to the board describing the situation and what the managing director proposes to do about it achieves two things at once: it puts the decision in front of the body that is supposed to own strategic decisions, and it creates a dated record of what was known and when. Silence here is read later as either not knowing, which is its own problem, or knowing and not raising it, which is worse.
The board minutes that actually protect you
Minutes that simply record "the managing director reported on the situation" protect nobody. What protects the managing director is a minute that records what was proposed, what the board decided, and whether the board adopted the managing director's proposal, modified it, or overruled it. If the board approves a course of action, the minute should say so in terms specific enough that it cannot later be read as generic comfort. Vague minutes tend to be interpreted against whichever individual ends up being the visible decision-maker, which in practice is usually the managing director.
What increases the cost of building this position
Three factors drive the cost of putting this position together after the fact rather than in real time. The first is how much of the record already exists in writing versus how much has to be reconstructed from calendars, phone logs and colleagues' recollection. The second is whether the counterparty or claimant is domestic, which keeps the dispute inside one procedural track, or has to be dealt with abroad, which usually means running two tracks in parallel. The third is whether the matter stays at the level of civil liability for loss or migrates into a criminal referral, since a criminal track runs on its own timetable and evidentiary standard and cannot simply be folded into the civil defence.
The instruction chain: written or it did not happen
Any instruction the managing director is relying on, whether from the board, a shareholder or a parent company, needs to exist somewhere in writing that predates the action taken. An instruction confirmed by email after the fact, summarising a call that already happened, is materially weaker than a contemporaneous written instruction, and it is often read as an attempt to construct cover rather than as a genuine record. Where instructions typically arrive by phone or informal message, the managing director's own practice of confirming them in writing immediately afterward, and asking for confirmation back, is the difference between having a chain and having a story.
What to check before day ten
- Whether the decision or event in question falls inside the managing director's own operational authority or should have gone to the board.
- Whether a board resolution exists that covers the specific action taken, not merely a general authorisation from an earlier meeting.
- Whether any instruction relied upon exists in writing and is dated before the action, not after.
- Whether the company's D&O or liability cover has been notified of the situation within whatever notification window the policy sets, since late notification can itself defeat cover regardless of the merits.
- Whether any parallel exposure exists abroad, through a foreign parent, a foreign counterparty, or assets located outside Sweden that a future claimant could pursue directly.
- Whether the managing director's own personal correspondence file has been started and is being maintained separately from the company's general records.
Can the managing director rely on a board resolution that approved the same decision?
A resolution helps only if it specifically covers the decision in question and was adopted before it was taken, not after. A general authorisation from an earlier meeting, or a resolution passed retrospectively once a dispute has already surfaced, carries far less weight and is often read as an attempt to shift responsibility rather than as genuine prior approval.
Does resigning immediately remove the exposure built up before resignation?
No. Resignation ends the managing director's exposure for decisions taken after the resignation date; it does nothing to the exposure already created by decisions and conduct before that date. A resignation dated to precede a known problem, rather than genuinely coinciding with it, creates a separate and distinct risk around the accuracy of the company's own records.
What happens if the managing director is also the majority shareholder?
Both roles carry their own duties and neither absorbs the other. Acting as shareholder does not authorise conduct that would otherwise breach the managing director's duties, and the fact that the same person controls the company does not make board process optional; if anything, the absence of independent board oversight tends to make the managing director's own written record more important as the only external check that existed.
The numbers
No statutory clock attaches to the ten-day period described here; it is a practical benchmark drawn from how quickly a usable paper trail decays, not a deadline written into company law itself. Where the law does attach specific figures, such as reporting deadlines that arise once a company is genuinely in financial distress, those figures sit inside the insolvency framework rather than inside the managing director's personal duties as such, and the deadlines that apply once a creditor's bankruptcy petition is filed are a useful comparison for anyone trying to work out how much runway actually remains once a dispute becomes visible from outside the company as well as from inside it.
Where a specific limitation period, notification window or threshold turns out to matter to a given file, it needs to be confirmed against the current text of the relevant rule rather than assumed from general guidance, because thresholds tied to index-linked base amounts move from year to year and a figure that was correct eighteen months ago is not a safe assumption today. What can be said reliably without a specific figure is what drives cost and timing: how much of the record already exists in writing, whether service and enforcement stay domestic or have to cross a border, and whether the matter stays civil or tips into a criminal referral running on its own separate timetable.
Where it usually goes wrong
Written notice to the board protects the managing director for the period it covers; it does not retroactively cover conduct that continued afterward without further reference back to the board. A managing director who flags a risk once and then keeps acting unilaterally for months afterward has, in practice, undone most of the benefit of that first notice.
A resignation dated to precede a known problem, rather than genuinely coinciding with it, is a separate and worse risk than the underlying exposure it was meant to avoid, because it turns a liability question into a question about the honesty of the company's own records.
This material assumes a formally appointed managing director. Where the real question is whether someone who was never formally appointed has been acting as a director in substance, exposure is assessed on a different footing entirely; the relevant starting point there is liability as a de facto director, not the framework set out above.
Group indemnities and D&O cover routinely exclude wilful misconduct or gross negligence, and insurers read the ten-day record described above closely when deciding which side of that line a claim falls on. A clean written record does not guarantee cover, but a poor one makes an exclusion argument considerably easier to run.
Where enforcement of a claim against the managing director, or by the managing director against a counterparty, has to run through a foreign court, the practical bite of the exposure depends heavily on where assets actually sit; the mechanics involved in recognising a Swedish judgment in Greece illustrate how much the cross-border piece can add to a matter that looked purely domestic at the outset.
Separately, specific duty areas carry their own distinct exposure that this ten-day playbook does not resolve on its own; board duties under cyber security rules is a case in point, since an incident there triggers its own notification clock that runs alongside, not instead of, the general position described here.
What to do next
This material gets a managing director through the immediate ten-day window: what to write, what to send, and what to keep separate from the company's general files. What it cannot do is assess whether a specific set of facts has already crossed the line into personal liability; that assessment needs the actual instructions, minutes and correspondence read against the current state of the law by someone doing the reading professionally, not against a general checklist. Where the underlying question turns out to be about a person acting without formal appointment rather than the formally appointed office, start from liability as a de facto director instead. For an assessment of where a live file actually stands, get in touch about the file.