I had the opportunity recently to meet Johannes M. Rowold, an outstanding young German scholar, during his visit at UCLA. He's working on a very interesting project and summarizes the research here:
My doctoral thesis is in the field of corporate law and supervised by Professor Christoph H. Seibt. It addresses the question what specific duties board members of German stock corporations have when a situation arises in which their company or they themselves face conflicting laws from different jurisdictions.
There are a number of cases where neither international nor domestic law offers a solution to a conflict of laws, with the result that sometimes a breach of either jurisdiction’s law is inevitable. Any natural person in this situation would decide on the basis of a cost-benefit analysis as to what law to break. However, with regard to situations in which the company faces such a conflict, under German corporate law board members owe a “duty to act lawfully” to their corporation. This means they are required not only to obey those provisions that directly pertain to themselves, but also to ensure that the company complies with all legal provisions it is exposed to, even if such compliance is economically less beneficial to the company compared with disobedience. In light of this, it is questionable how board members are required to make a decision in a situation in which a breach of law occurs in either case.
A practical example of this conundrum can be found in a jurisdictional dilemma typical of the 21st century: the broad US discovery rights and the strict European (and German) privacy laws usually collide with each other when US courts or US authorities request the transfer to them of certain data electronically stored on European servers. The addressees of those requests are threatened with sanctions from the US in the event of non-compliance. However, compliance with requests by non-member states like the US often constitutes an infringement of data protection laws in Europe, which is sanctioned by the imposition of a fine.
He also explains why he chose UCLA School of Law for his US base:
I chose UCLA School of Law for a research visit because it is a top-ranked law school in the US with a declared research focus on corporate law, which is evidenced by the high international profile of its business law centers. Furthermore, UCLA Law’s library hosts one of the most comprehensive collections of legal material in California and the US. Ultimately, UCLA Law had a specific program for visiting researchers pursuing a PhD degree at their home schools.
I look forward to seeing his final results.