Joint Liability of Directors in the Absence of Individualized Responsibilities

In November 2025, Brazil’s Superior Tribunal de Justiça (STJ), in Special Appeals Nos. 2,053,505 and 1,907,634, held both directors of a company jointly liable for damages caused to the company by the omission of only one of them, based on the absence of an express allocation of responsibilities to each director in the articles of association.

This decision signals a stricter approach to assessing directors’ duty of care in preserving corporate assets in limited liability companies, especially those subsidiarily governed by the Brazilian Corporations Law (Law No. 6,404/76).

Background of the Case and the STJ Decision

The dispute concerned the destruction of a leased warehouse owned by the company due to a fire caused by lightning. The company had neither taken out property insurance nor required the tenants to do so. One of the managing partners filed a claim against the other seeking compensation for the damages.
The lower court dismissed the claim; however, the Court of Appeals of Paraná reversed the decision, accepting indications that only the defendant managing partner effectively managed the company and applying the Corporations Law on a subsidiary basis. The defendant managing partner was therefore ordered to bear the losses arising from the fire individually.
Subsequently, the STJ, by majority decision, held that the claimed indemnification was not due, as the omission in protecting the company’s assets gives rise to joint liability of the directors.

Key Factors in the Decision

In the opinion delivered by Justice Raul Araújo, which prevailed, the following elements were decisive for the STJ in recognizing joint liability:

There was no segregation of operational functions between the directors in the articles of association, nor any delineation of individual roles or supervisory duties;
It was established that both directors were aware of the terms of the lease agreement, including the obligation to obtain insurance by the company, which was not fulfilled; and
There was evidence demonstrating effective involvement by both in management, including through periodic audits.

Legal Grounds for Joint Liability: Directors’ Duties and Asset Protection

The STJ’s decision reaffirmed the reasoning of the first-instance court, grounded in the existence of a legal duty of care owed by directors and the resulting personal liability in the event of failure to properly discharge such duty.

The duty of care is provided for in Article 1,011 of the Brazilian Civil Code and in Articles 153 and 155 of the Corporations Law, which establish that a director must exercise the care that a diligent person would employ in managing their own affairs. Negligent omission in fulfilling this duty gives rise to an obligation to indemnify the company or third parties harmed, as set forth in Article 1,016 of the Civil Code.

Conclusion

The STJ’s decision reinforces that, in the absence of a clear allocation of responsibilities, directors are deemed jointly responsible for management and for preserving corporate assets, regardless of their direct involvement in a specific act, and may therefore be held liable for omissions.

This underscores the need to establish a management structure that reflects the actual distribution of responsibilities—or that actively promotes such allocation—especially in family businesses, where shared management is commonly provided for in the articles of association, even though, in practice, distinct roles may be assigned to each member.

Our Recommendations

In light of the STJ’s position, certain measures are advisable to enhance protection for individuals involved in the management of family businesses:

Clearly define, in the articles of association or in specific corporate documents, the roles and responsibilities of each member of management;
Implement corporate governance practices to establish formal reporting and oversight duties for all those involved in management; and
Standardize processes for information sharing among directors and formalize decisions through appropriate corporate records, even if maintained internally when confidentiality is required.