Director Duties and Liabilities in Mexico

Introduction

Director duties in Mexico impose fiduciary and statutory obligations on company directors to act in the interests of the company. Breach of these duties may result in civil liability, disqualification, or criminal sanctions.

Duty of Care and Diligence

Directors must exercise reasonable care, skill, and diligence in performing their functions. The standard is objective (what a reasonable director would do) and is assessed by reference to the director’s actual knowledge and experience.

Fiduciary Duties

Directors must act in good faith, avoid conflicts of interest, and not misuse their position or company information for personal gain. The duty to act for a proper purpose requires directors to exercise powers for the purposes for which they were granted.

Insolvent Trading

Directors may be liable for wrongful trading if they fail to take appropriate steps to minimize creditors’ losses when insolvency is unavoidable.

Enforcement

Directors may be disqualified for misconduct. Remedies include compensation orders, civil penalties, and criminal prosecution for serious breaches.

Conclusion

Director duties ensure accountability and promote good corporate governance, protecting shareholders, creditors, and the public interest.