Governance under the new Company Code: What you should know Brussels - - PowerPoint PPT Presentation

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Governance under the new Company Code: What you should know Brussels - - PowerPoint PPT Presentation

Dec 25, 2023 548 likes •1.04k views

Women on board 26 March 2019 Governance under the new Company Code: What you should know Brussels London - www.liedekerke.com Overview Topic Speaker Christel Van den Eynden, Partner 1. Introduction New models of governance Constance

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: What you should know

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Overview

Topic Speaker

1.

Introduction Christel Van den Eynden, Partner

2.

New models of governance Constance Dumortier, Junior Associate

3.

New rules on the members of the different bodies Céline Tallier, Senior Attorney

4.

Gender parity in listed companies and public interest entities Stefania Sacuiu, Associate

5.

Legal entities as directors Charlotte Schaumans, Associate

6.

Dismissal of directors – what can the AoA provide for? Jan Vreys, Senior Attorney

7.

Directors’ liability Valérie Simonart, Partner

8.

Changes to the decision-making procedure Ellen Vermeire, Associate

9.

Conflict of interest rules Wim Dedecker, Counsel

10.

New competences of the committee of independent directors Olivia Szerer, Junior Associate

11.

Vote at the general meeting Jacques Meunier, Partner

12.

Transitional regime Valérie Simonart, Partner

13.

Conclusion Christel Van den Eynden, Partner

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019

Constance Dumortier

Governance under the new Company Code: New models of governance

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Option 1 One-tier system

  • Collegial board of directors
  • Default regime
  • Executive committee

(directiecomité/comité de direction) abolished

  • Sole director
  • In listed companies, the sole

director must be NV/SA with a collegial board (option 1A or

  • ption 2)

Option 1A Board of directors (current system) Option 1B Sole director

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Option 2 Two-tier system – Supervisory board and management board

  • Two collegial bodies
  • Respective powers (no overlap):
  • Supervisory board supervises management board,

defines general policy and strategy and holds all the competences specifically allocated to the BoD by the CAC

  • Management board has the residual (operational)

competences

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: New rules on the members of the different bodies

Céline Tallier

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Employees?

  • One-tier system - members of the BoD: no
  • Two-tier system - members of the

Supervisory Board and members of the Management Board: no

  • Daily management functions: permitted
  • Other functions: permitted
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Two-tier system : no joint membership

  • Joint membership is permitted in the current

“two-tier system”

  • No joint membership in the CAC two-tier

system

  • Credit institutions and insurance enterprises:

board of directors and management committee - directors being members of the management committee

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Independent directors

  • New definition
  • General legal criterion
  • Specific criteria to be provided for in the 2020

Belgian Code on Corporate Governance

  • presumption
  • “comply or explain”
  • In a two-tier system, members of the

Supervisory Board

  • No variable remuneration
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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Gender parity in listed companies and public interest entities

Stefania Sacuiu

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  • 1. One-tier structure (7:86)
  • At least 1/3rd of the members of the BoD must be of a

different gender

  • The gender of a board member that is a legal person is given

by the gender of its permanent representative

  • The minimum required number of board members of a

different gender is rounded up or down to the nearest whole number

  • Economic sanctions in case of non compliance
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  • 2. Sole director

The sole director must be NV/SA with a collegial management body (7:86)  the gender parity requirement applicable to the BoD is applicable to the management body of the NV/SA-sole director (7:101)

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  • 3. Two-tier structure

The gender parity requirement applicable to the BoD is applicable to the supervisory board (7:106)

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Legal Entities as Directors

Charlotte Schaumans

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Appointing Legal Entities

  • Where?
  • In management body
  • Sole director
  • BoD
  • Management Board /Supervisory Board
  • For daily management
  • Obligation to appoint permanent

representative

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Permanent Representative

  • Must be an individual
  • No cascade
  • Must not be a shareholder, director, officer or

employee of the legal entity-director

  • Subject to same conditions as director
  • Jointly liable with legal entity-director
  • No duplication
  • Sole director: may appoint substitute

permanent representative

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Legal Entity-Sole Director of Listed Companies

  • Legal entity-sole director must be NV/SA with

collegial management

  • Application of the legal rules applicable to the

board of directors:

  • independence, remuneration, diversity
  • conflicts of interest
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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Dismissal of directors – what can the AoA provide for ?

Jan Vreys

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From 1873 until the CAC

  • NV/SA: Dismissal “ad nutum” – seen as a

protection of shareholders, thus mandatory law.

  • Result : No protection (in terms of notice

period, indemnity, special majority…).

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The new CAC (1/2)

  • Dismissal “ad nutum” maintained as default
  • ption but ceases to be mandatory law.
  • The GM has the right to grant a notice period or grant

an indemnity in lieu of notice – but AoA can exclude this right.

  • AoA may provide that dismissal always requires a

notice period or an indemnity.

  • Even so, dismissal without notice or indemnity

remains possible for “cause” (“justes motifs/wettige redenen”).

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The new CAC (2/2)

  • NV/SA with sole director
  • Sole director may or may not be appointed in the AoA.
  • Optional clause in the AoA: consent of the sole director is

required for the sole director’s dismissal.

  • Even if this clause is specified in the AoA: no absolute

protection for the director:

  • GM is always entitled to dismiss the sole director for cause (“wettige

redenen / justes motifs”) – note: same majority as for an amendment of AoA; or

  • after minority shareholders’ suit to remove the director for cause

(10% or 3% of the share capital).

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Directors’ liability

Valérie Simonart

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  • A. Caps (art. 2:57) (1/2)
  • All members of administrative bodies and day-to-

day managers

  • All wrongful acts and liabilities, subject to

exceptions

  • Towards the company and third parties
  • Between EUR 125,000 and 12,000,000

(depending on the company size)

  • By damaging event
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  • A. Caps (art. 2:57) (2/2)
  • Exceptions:
  • Frequently occurring minor faults, gross faults, faults

committed intentionally or with the intent to cause damage

  • Withholding tax on professional income, VAT, tax

evasion and social security contributions

  • Liability in another capacity
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  • B. Indemnification agreements (art. 2:58)
  • No limitation beyond art. 2:57
  • The company and its subsidiaries cannot exempt

directors from their liability or indemnify them in advance

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Changes to the decision-making procedure

Ellen Vermeire

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  • Alignment of the decision-making procedure

with actual practice

  • Digital communication
  • Written procedure BoD
  • Definition of daily management
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  • Digital communication
  • E-mail communication between company and

shareholders, directors and statutory auditors

  • Website of company
  • Written procedure BoD
  • Possible for all decisions except those

excluded in AoA

  • Tax consequences
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  • Definition of daily management
  • CAC provides for definition
  • Daily management includes:
  • actions and decisions in the context of day-to-day

business of a company

  • actions and decisions not requiring intervention of

BoD because of (i) minor importance, OR (ii) urgent character

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Conflict of Interest Rules

Wim Dedecker

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  • General
  • Requirement of a pecuniary conflict remains
  • Current exemptions (95% held company and usual transactions)

remain

  • Disclosure regime remains the same (inform other directors,

board minutes/special report, disclosure to the statutory auditor, statutory auditor report)

  • Sanctions
  • General duty to abstain
  • Duty on the conflicted director to abstain from participating in the

discussions and voting (also for non-listed now) - - - Leave the room

Introduction

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Who decides? (one-tier)

1 director Board of Directors Board of Directors (all conflicted) GM decides Board will be held without the conflicted director(s) GM decides

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Who decides? (two-tier)

Management Board Supervisory Board decides GM decides Supervisory Board Supervisory Board decides without the conflicted member Supervisory Board (all conflicted)

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: New competences of the committee of independent directors

Olivia Szerer

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“524 Procedure” : committee of independent directors

  • Brief reminder of the existing regime (524 CC)
  • Transaction between:

a) A listed company (or its subsidiaries ); AND b) A listed company’s affiliates other than its subsidiaries

  • Must first be submitted to a committee of

independent directors

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“524 Procedure”  7:97 CAC

  • Scope is extended to cover:
  • Transactions with subsidiaries of which the

controlling shareholder owns 25% or more

  • Board proposals for:
  • Contribution in kind, of a branch of activity or of all

assets and liabilities ;

  • Merger, demerger and assimilated transactions
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Controlling Shareholder Listed Company Company A

Subsidiary 2 Subsidiary 1

25% 90% 40% 75% 100%

“524 Procedure”  7:97 CAC

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Vote at the General Meeting

Jacques Meunier

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Non listed companies

  • “Welcome to the multiple votes paradise”
  • By default, 1 share = 1 vote
  • But AoA can deviate from this rule
  • Amending AoA (3/4th majority)
  • 1 share can have 2, 3, 4, … 50 or more votes
  • Imagination is the limit
  • Transparency in the share register
  • In the AoA (not in the SHA only)
  • Issuance exclusively by GM (not the BoD)
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Listed companies

  • Loyalty double voting shares
  • AoA must be amended (2/3rd majority)
  • Fully paid-up and registered shares
  • Uninterrupted holding during 2 years
  • Starts when the shares were held as registered

shares

  • Authorised transfers (universal, certification or

affiliated person)

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Other points of attention

  • Abstention votes at EGM
  • Shares without voting rights
  • Classes of shares: be prudent because

paradise could easily become hell

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Brussels • London - www.liedekerke.com

Women on board

26 March 2019 Governance under the new Company Code: Transitional regime

Valérie Simonart

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  • A. CAC
  • Publication of the Law: existing companies: opt in

(with effect as from 1 May 2019 at the earliest)

  • 1 May 2019: new companies: CAC
  • 1 January 2020 :
  • Application of mandatory provisions of the CAC
  • At the first modification, obligation to align the AoA with the

CAC

  • 1 January 2024: ultimate date to align the AoA
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  • B. Directors’ liability
  • Principle: application of the law in force at the

time the wrongful act was committed

  • Application of art. 2:57 (caps) to the wrongful acts

committed after the CAC becomes applicable to the company, i.e. 1 January 2020 or earlier (if opt- in)

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  • C. Ongoing agreements
  • Principle: application of the law in force at the time

the agreement was entered into

  • Exception : mandatory provisions of the new law

apply for the future

  • Application of art. 2:58 (indemnification

agreements) to the wrongful acts committed after the CAC becomes applicable to the company, i.e. 1 January 2020 or earlier (if opt-in)

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Thank you for your attention

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Liedekerke Brussels

Boulevard de l’Empereur 3 Keizerslaan 1000 Brussels Belgium T: +32 2 551 15 15

Liedekerke London

33 Sun Street London EC2M 2PY United Kingdom T: +44 207 151 03 60

These are presentation slides only. The information contained in these slides does not constitute legal advice and should not be used as the basis for giving advice without checking the primary sources.