Responsibility of Corporate Directors of SMEs for Violation of the Duty of Due Diligence in the Context of COVID-19

Abstract

COVID-19 is a reality that has a negative impact on all economic systems and constitutes an evil that itself causes other evils, by mobilizing the restriction of freedom of movement, physical communication, destruction of the fiscal, economic and development system, of the business fabric, giving rise to inaccessibility of employability and incapacity of social services. Small and Medium Enterprises are the most affected by this situation, as they depend in many of the circumstances on the social and state services that are provided, in addition to having a deficient capacity for self-financing and resilience in times of crisis. In this context, situations are frequent in which managers with total disregard for the legally instituted rules, as well as the market rules, resort to dishonest maneuvers to maintain full operation, exemption from the payment of taxes and fees, speculation on the product prices and services, breach of contracts, hoarding of goods and mass dismissals of employees using the COVID-19 pretext as the fundamental reason for these decisions, sometimes with the total ignorance of the partners, the State and to the detriment of workers and third parties. In this context, it is important to reflect on the Responsibility of Corporate Directors of PMEs for the Violation of the Duty of Diligence in the Context of COVID- 19, given the awareness that not always the market, or the health crisis, is responsible for the situations that occur, as in many circumstances you may come across incapable managers who do not value good Administration and who harm investors (Partners), employees (Workers), third parties and the State.