Criminal Liability of the Sole Director or Board Member (Art. 31 CP)

When a company commits an offence, the immediate question is: who is liable? The company neither decides nor acts of its own accord; the people who govern it do. That is why the sole director, joint and several directors and the members of the board of directors occupy a position of specific criminal exposure. As criminal lawyers specialising in the defence of directors, we explain what this personal liability involves, how it differs from that of the company itself and how the director's defence is built.

The Starting Point: Art. 31 CP

Article 31 of the Spanish Criminal Code (CP) solves a technical problem often described as acting on behalf of another. Many economic offences are special offences: they can only be committed by a person who holds a particular status —being a taxpayer, a debtor, a trader, a director—. In practice that status lies with the company, not with the natural person who takes the decisions. Without a closing rule, the executive could argue that they are not the debtor or the taxpayer, and the company that it does not act.

Art. 31 CP closes that gap: a person acting as a de facto or de jure director of a legal entity, or on behalf of or representing another, is personally liable even where the conditions, qualities or relationships required by the offence are present in the entity rather than in them. In other words, it attributes to the director the perpetration of the special offence committed through the company.

De Facto and De Jure: Who Is Covered

The law expressly equates two figures, and it is worth being clear about them:

• De jure director: the person formally appointed and registered at the Commercial Registry —sole director, joint, joint and several directors, board members—.
• De facto director: the person who actually runs the company and takes the decisive decisions even if they do not formally hold the office. This is the clause that prevents anyone from hiding behind a nominee or behind the absence of registration to escape liability.

This extension is decisive: the reality of decision-making power prevails over the registry appearance. The person who in fact governs the company is not released merely because their name is not on the documents; and the person whose name appears without governing has, conversely, a defensive argument that must be evidenced through documents.

The Duty of Oversight and the Position of Guarantor

A director's liability arises not only from what they do, but also from what they fail to prevent. Commercial law imposes on them a general duty of diligence and of supervision of the business (art. 225 of the Capital Companies Act), which on the criminal side translates into a position of guarantor: a specific legal duty to prevent offences from being committed within the structure they run.

Hence a director may be liable for commission by omission where, knowing of or being able to know of criminal conduct and having the effective ability to prevent it, they fail to take the measures within their reach. The boundary lies in three elements that the defence must examine case by case:

• Control over the act: a real ability to decide on or to prevent the conduct charged.
• Knowledge: direct intent, conditional intent (dolus eventualis) or wilful blindness, as opposed to simple, non-culpable ignorance.
• Reasonable expectability: that they could and should have acted otherwise with the information available.

Art. 318 CP: Offences Against Workers

In the employment field there is a specific rule of attribution. Article 318 of the Criminal Code provides that, where offences against workers' rights are attributed to legal entities, the penalty is imposed on the directors or service managers responsible for the acts and on those who, knowing of them and being able to remedy them, failed to take measures to do so.

This is an express embodiment of the duty of oversight: in matters of health and safety, working conditions or collective rights, art. 318 CP pins the liability on the specific director or person in charge, and it also allows the court to order the ancillary consequences of art. 129 CP (closure, suspension of activities, judicial intervention). It is not liability for holding office in the abstract, but for the concrete failure to remedy what is known.

The Link with the Liability of the Legal Entity (Art. 31 bis CP)

Two forms of liability that coexist in the same proceedings should not be confused:

• That of the natural person (art. 31 CP): the director is liable as the perpetrator of the offence they decided on or carried out, or failed to prevent.
• That of the legal entity (art. 31 bis CP): the company is criminally liable, autonomously, for offences committed in its name or on its behalf and for its direct or indirect benefit by its representatives, or by those who, being subject to their authority, were able to offend because the duties of supervision, oversight and control were seriously breached.

The two are compatible and cumulative: convicting the company does not exonerate the director, nor the other way round. The company may be exempt if it shows that, before the act, it had in place an effective organisation and management model —a compliance programme— supervised by a body with autonomous powers, and that the perpetrator fraudulently circumvented it (art. 31 bis 2 CP). But that exemption protects the legal entity; it does not automatically exonerate the director behind the act.

Delegation of Functions as a Defence

No organisation can operate without delegating. A director cannot control everything, and the law accepts this. Valid and diligent delegation shifts the duty to act onto the delegate and narrows the scope of the delegating director's liability. But delegation has limits: a residual duty always remains on the director to:

• Select a suitable person for the delegated function (culpa in eligendo).
• Provide the resources and authority needed to discharge the task.
• Oversee how the system operates and react to warning signs (culpa in vigilando).

Hence the importance of delegation being documented, resting on competent people and backed by genuine reporting and audit mechanisms. A well-constructed delegation is one of the strongest defensive arguments; a merely nominal delegation, or one without oversight, offers no protection against a charge.

Lines of Defence for the Director

1. Lack of control over the act: showing that the director had no effective control over the decision nor access to the information decisive for the offence.
2. Diligent delegation: demonstrating that control, audit and reporting mechanisms existed, evidencing the good faith of the delegating director.
3. Defence of the non-executive board member: proving compliance with the duty of oversight (art. 225 of the Capital Companies Act) and the absence of reasonable warning signs requiring intervention.
4. Analysis of the board minutes: isolating the decisions in which the charged director did not take part, voted against or expressed formal reservations.
5. Reconstruction of the governing body: documenting who decided what, with what information and under what delegation, in order to narrow —or rule out— the individual charge.

In this area, the settled case law of the Supreme Court insists that criminal liability is personal and requires proof of the director's specific involvement —whether active or by omission— ruling out any automatic inference from merely holding office. That is precisely the technical margin worth working on from the outset of the proceedings.