Insights inspired by the ZF Live discussion with Stelian Garofil and the experience of Dragne & Asociații in corporate criminal law and governance compliance
In Romania’s rapidly evolving business landscape, the regulatory environment has become significantly more sophisticated. As corporate structures grow more complex, so do the criminal liability risks faced by managers, directors, and shareholders. Unfortunately, many companies only realize the extent of these risks when a crisis emerges—during an audit, a regulatory investigation, or the early stages of a criminal file. By then, prevention is no longer an option; it is a missed opportunity.
This article outlines the key managerial errors, high-risk red flags, and governance practices that can prevent exposure to corporate criminal liability in 2025.
Managerial mistakes that can generate criminal liability
One of the most common situations is the signing of documents without a genuine review of their content, relying on routine or on the company’s traditional way of working. In many cases, managers make decisions based on incomplete or unverified information, which can lead to the commission of offenses such as forgery, crimes against property, or service-related offenses.
Another major error is the confusion between the company’s assets and personal assets, a practice still present in many companies—especially those with domestic capital—which can lead to charges of embezzlement, tax evasion, or offenses regulated by company law.
Another real risk is the tendency of some managers to “replicate” competitors’ behavior without verifying whether that behavior is legal:
“The biggest mistake is to assume that if a competitor applies a certain operation or procedure, it is automatically correct. In reality, if the operation/procedure is unlawful, both companies are criminally exposed.”
Management errors frequently ignored in companies
Managers often focus on the specifics and legislation applicable to their industry, but forget that there are also general obligations provided by other laws, including the Criminal Code. For example, a Chair of the Board of Directors who approves the use of company assets for personal benefit or for the benefit of another person may become subject to criminal investigation for a potential offense of embezzlement.
An important and often overlooked area is occupational health and safety (OHS). Seemingly minor accidents can lead to criminal cases if the company has not implemented clear internal rules for each department and has not ensured that these procedures are properly understood and applied by employees.
How managers can protect themselves from the risk of signing non-compliant documents
For example, in projects such as accessing EU funds, the project manager or the company’s representative (in the absence of a project manager) is the one who signs the reimbursement or funding application. If the documentation contains false or inaccurate data, that person may be held criminally liable, even if the non-compliant or inaccurate documents were prepared by others.
Recommendations from Dragne & Asociații:
- validation of documents by competent departments (finance, accounting, procurement, legal, compliance);
- clear procedures and well-defined responsibilities at both departmental level and in employees’ job descriptions;
- verification of the accuracy and legality of information when committing the company in legal relationships;
- traceability of all decisions.
What can shareholders do? Where do their powers begin and end?
Romanian shareholders often make the mistake of interfering in the duties of directors, attempting to directly influence operational decisions.
Top 3 shareholder mistakes identified in Dragne & Asociații’s practice:
- Exceeding the role of shareholder/partner – influencing directors instead of allowing them to exercise their legal duties.
- Treating consultants’ recommendations as a liability shield – advice from a tax or legal consultant does not exempt criminal liability if the final decision is incorrect.
- Confusing personal assets with company assets – one of the most dangerous practices, with both fiscal and criminal consequences.
Shareholders/partners should exercise a strategic, not operational, role and leave management to professionals who can grow the business organically and in compliance with the law.
Criminal Liability of Board Members in Corporate Governance
Criminal liability within a Board of Directors is individual, not collective. There is no joint liability unless all members are direct participants in the offense.
Key principles include:
- Each board member is liable for their own actions, even if taken at the Board’s “instruction”
- Legal liability prevails over internal accountability to the Board
- Approving or tolerating non-compliant practices may constitute a criminal offense
- Failing to intervene when clear indicators of fraud or misconduct arise can itself be criminally negligent
Red Flags Managers Must Identify and Act Upon Immediately
High-risk situations rarely appear as overt misconduct. More often, they present as operational anomalies:
- Requests that deviate from established routines
- Sudden or unexplained time pressure
- Incomplete, inconsistent, or poorly justified documents
- Discrepancies between internal and external reporting
- Attempts to bypass established procedures
In the experience of Dragne & Asociații, these signals are often the earliest indicators of potential criminal exposure.
What Responsible Management Looks Like in 2025
Modern corporate leadership must be:
- Data-driven and grounded in verifiable information
- Supported by clear, digitalized, and auditable procedures
- Deeply integrated with legal, tax, and compliance functions
- Focused on prevention, risk management, and internal controls
- Intolerant of misconduct and equipped with continuous training
- Able to rely on automated tools for monitoring compliance and operational risks
As Dragne & Asociații observes:
“A growing number of companies now understand that preventive consulting is far more effective than crisis management.”
Concusion
Corporate criminal liability is no longer theoretical—it is a tangible, immediate risk driven by increasingly complex regulations and heightened scrutiny from authorities. The only sustainable strategy for 2025 and beyond is proactive, structured legal, fiscal, and compliance prevention.
A robust governance framework does not slow business down. It protects it.