Liability of former private foundation board members: claim and limitation

Section 29 PSG places liability towards the private foundation. The foundation is therefore the claimant as a separate legal person. A beneficiary, founder or newly appointed board member may suffer a personal disadvantage, but that does not by itself make the person the holder of the foundation’s damages claim.

Leaving office does not change that allocation. The review asks whether the alleged breach occurred during the former office and whether it caused compensable loss to the foundation. The person’s later role or lack of contact with the foundation does not answer the liability question.

The foundation’s loss must therefore be separated from any personal claim of another participant. This prevents a dispute about board composition from being confused with the foundation’s own damages claim.

Section 29 PSG connects liability to loss caused by a culpable breach of duty. At least four questions must therefore remain separate: What duty applied, what was the breach, what loss did the foundation suffer and why did this conduct cause it?

An economically adverse result alone is not enough. A business decision may later prove unsuccessful without proving a culpable breach. Conversely, an absent decision basis, an untreated conflict or conduct contrary to the foundation declaration may be relevant to liability.

The standard must be assessed against the information and legal situation at the time. The current board should not simply replace the former decision context with later developments. The guide to foundation board and liability explains the wider framework.

Section 17 PSG assigns management and representation of the private foundation to the foundation board. After a change, the current register position and the applicable foundation declaration should therefore be checked first. They show who may request records, adopt a resolution and decide whether a claim is pursued.

The former member no longer represents the foundation in that organ capacity. The person may be a source of information about earlier conduct or a potential defendant. Those roles must not be confused with the foundation’s current authority to act.

If a current board member is personally involved or faces a concrete conflict, the claim should not be controlled through that person’s own interest. An independent decision and representation solution must be examined. The required court or organ measure depends on the declaration, composition and procedural position.

Section 1489 ABGB generally provides a three-year period from the time when the injured party knows the loss and the person who caused it. For a private foundation, the board-change date is therefore not automatically decisive. The question is when the foundation knew the facts supporting the claim in a sufficiently reliable way.

A first suspicion or an unexplained concern does not automatically provide a reliable date. Conversely, the foundation cannot necessarily postpone the start merely because the legal assessment or exact amount remains disputed. Reports, audit findings, payment records and the course of the investigation should be used to reconstruct actual knowledge.

Section 1489 ABGB also provides a thirty-year limit where the loss or the person who caused it has not become known. The provision contains a specific rule for certain intentional criminal acts threatened with more than one year of imprisonment. The applicable route depends on the facts and should not be stated in general terms.

A board member may have made several distinct decisions during the office period. Each alleged breach should therefore be recorded with its conduct, loss, causation and knowledge. A single label such as “poor management” is not enough for limitation or evidence review.

The file should show when the foundation first learned of a concrete loss and possible responsibility. Relevant material may include audit reports, internal investigations, bank records, contracts, valuations and digital communications. Later legal opinions must be separated from the original factual findings.

Ordinary settlement discussions or an internal review should not be treated as a limitation-preserving step without legal assessment. Whether a lawsuit or another qualified procedural act is required depends on the claim and procedural situation.

Before deciding on a claim, the foundation needs a complete file. It should include the current register extract, relevant versions of the foundation declaration, organ appointments, minutes, contracts, payment flows, audit reports and communications showing how the matter came to light. Preserve the records in their original form with date and source.

Then separate the roles: who decides for the foundation, who cannot participate because of a conflict, who is the alleged defendant and who is only a source of evidence? This prevents a possible defendant from controlling the foundation’s decision about litigation.

The exact court jurisdiction, form of action, evidence preservation and limitation step must be assessed for the individual case. The guide to removal of the foundation board addresses organ disputes separately and does not replace this damages review.