Do the governing bodies have any special duties and responsibilities within the context of COVID-19 events?

Companies’ governing bodies are subject to special duties of care in the management of the risks inherent to the COVID-19 threat.

Companies shall prepare and implement contingency plans geared at continuing their business and the safety of their employees, shareholders, customers, suppliers and other stakeholders.

Whenever possible, companies should create taskforces to monitor, on the one hand, the evolution of contagion and contention of the COVID-19 in close liaison with the health and local authorities and, on the other hand, the economic, financial and commercial impacts that materialize or that could foreseeably impact their business or that of third parties, adjusting their commercial strategies in order to minimize and overcome any issues that may arise.

It is particularly important that such plans are communicated on time to all corporate structures and implemented, monitored and reviewed, when required. It is equally important that the process of setting up and approving such plans by the company’s decision-making bodies is guided by rational business criteria and duly documented.

 

Should face-to-face meeting of the governing bodies be reconsidered?

Although not directly deriving from the law, the current circumstances may also justify the postponement of meetings already called or even to revoke calls in order to minimize the risks associated with the holding of face-to-face meetings of shareholders. It is also important to ensure the timely and proper communication of the resolutions to the shareholders and other members of the governing bodies involved.

In any case, and whenever it proves necessary to approve resolutions to be taken by general meetings, companies should consider the use of telematic means, or, alternatively, the holding of unanimous resolutions in writing. The possibility of resorting to these means should be evaluated on a case-by-case basis, as it depends on the bylaws and on the existence of rules of procedure, means and resources that ensure the reliability of communications.

In addition, in relation to meetings of other governing bodies, contingency plans may be considered to avoid the physical presence at meetings of at least part of the members or other measures to ensure the existence of a sufficient quorum at such meetings, namely the use of telematic means, and the regulations that prove to be necessary or appropriate that may be approved for this purpose. 

 

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This information is being updated on a regular basis.

The information provided and the opinions expressed herein have been prepared with the help of VdA Legal Partners and are of a general nature. They are not in lieu of appropriate legal advice in connection with specific cases.