Latest updates

Supreme Court of Cassation examines rules on reimbursement of company loans
Grieco e Associati
  • Italy
  • 23 September 2019

The Supreme Court of Cassation recently held that the postponement of loan reimbursements to company partners or shareholders applies not only in cases of court-assessed insolvency, but also if a company experiences temporary financial difficulties. The court also found that company management must refuse to reimburse loans to partners or shareholders if the company was experiencing financial difficulties when the loan was granted or the reimbursement was requested.

Deloitte looks at first round of CAMs
Cooley LLP
  • USA
  • 23 September 2019

AS 3101, the new auditing standard for the auditor's report that requires disclosure of critical audit matters (CAMs), is effective for audits of large accelerated filers for fiscal years ending on or after 30 June 2019. Deloitte has reported that an average of 1.8 CAMs were disclosed per audit report and that the most commonly disclosed related to goodwill and intangible assets.

Commercial corporate entities: a brief outline
Cocalis & Partners
  • Greece
  • 02 September 2019

An important consideration before doing business in Greece is choosing the most suitable corporate entity. However, there are several other key elements to consider. A one-stop service is available (with limitations) for the incorporation of all company types, provided that they use basic (ie, template) articles of association; however, there are no 'off-the-shelf' companies in Greece. This article outlines the basic types of Greek corporate entity (excluding maritime entities).

Board gender diversity reaches new milestone
Cooley LLP
  • USA
  • 26 August 2019

A new milestone has finally been reached for board gender diversity: there are no longer any companies in the S&P 500 with all-male boards. According to a publication on US Board Diversity Trends in 2019, 45% of new board positions among the Russell 3000 were filled by women in 2019. This is up from 34% in 2018 and a substantial improvement compared with only 12% in 2008. Under the new law, public companies will be required to have at least one woman on their board of directors by the end of 2019.

FASB tentatively decides on new staggered approach to effective dates for major standards
Cooley LLP
  • USA
  • 19 August 2019

The Financial Accounting Standards Board recently signalled its intent to adopt a new two-bucket approach to stagger the effective dates for new major accounting standards. Under the new approach, the new standards' effective dates would be delayed for entities in bucket two (ie, smaller reporting and private companies, employee benefit plans and not-for-profit organisations) for at least two years after the effective dates for entities in bucket one (ie, other Securities and Exchange Commission filers).

Will director-shareholders always be liable to repay unlawful dividends?
Squire Patton Boggs
  • United Kingdom
  • 19 August 2019

A series of recent cases have examined the circumstances in which a dividend can be challenged on the basis that it has been unlawfully paid. In one such case, the High Court considered a number of key principles regarding dividend payments and the circumstances in which directors can be pursued for dividends paid prior to an insolvency. This judgment provides some comfort to directors who rely on professional advisers to determine whether to declare a dividend payment.

Delaware Supreme Court allows Caremark duty of loyalty claims against directors to survive dismissal motion
Cooley LLP
  • USA
  • 12 August 2019

What does it take to plead a Caremark case that can survive a motion to dismiss? A recent case illustrates that a board can help establish one if it simply leaves compliance and risk oversight entirely to the prerogatives of management. However, the case is also a warning that directors should be proactive in conducting risk oversight and could face liability if they fail to make a good-faith effort to implement an oversight system and then monitor it.

Shareholders' agreements – enforceability issues
Kayum & Demir
  • Turkey
  • 12 August 2019

The enforceability of share options is one of the most controversial issues in the context of shareholders' agreements. There are a number of widely used solutions to improve the enforceability of share options in this regard, including inserting share options provisions into articles of association, establishing a holding company outside Turkey and inserting a statement on registered share certificates that shares are subject to transfer restrictions.

Directors' revocation and change of company control
Grieco e Associati
  • Italy
  • 05 August 2019

In a recent decision, the Supreme Court of Cassation stated that the revocation of members of a controlled company's board of directors due to the transfer of the majority shareholdings to a third party does not constitute just cause for a director's revocation. Consequently, a change in control of a holding company does not breach the duty of trust between the company and its board members.

E-financial statements are first stage of digital revolution in Polish corporate law
Kubas Kos Gałkowski
  • Poland
  • 29 July 2019

The legislature recently introduced a regulation on e-financial statements. As a result, all financial reports submitted by Polish companies (with the exception of entities preparing financial statements in compliance with the international accounting standards) must be drawn up electronically using files with an '.xml' extension as defined by the Ministry of Finance. Polish companies should take appropriate steps to mitigate the potential risks and comply with this revolutionary regulation as soon as possible.

FASB to consider delaying required adoption dates of new standards for some companies
Cooley LLP
  • USA
  • 29 July 2019

The Financial Accounting Standards Board will consider whether the adoption dates for new accounting standards should be delayed for small public companies and privately held businesses. Small business finance professionals at a recent Financial Accounting Standards Advisory Council meeting indicated that, while they may be comfortable following the same rules, smaller companies do not have the same resources as large public companies and need extra time to implement significant new accounting rules.

Spot survey shows use of ESG metrics in incentive compensation plans
Cooley LLP
  • USA
  • 22 July 2019

A compensation consultant recently conducted a spot survey of 135 companies which looked at the prevalence and type of environment, social and governance (ESG) metrics used in incentive compensation plans, including metrics relating to the environment, employee engagement and culture and diversity and inclusion. Efforts to link ESG factors to executive compensation have been a common thread in numerous shareholder proposals.

ISS takes early look at 2019 proxy season
Cooley LLP
  • USA
  • 15 July 2019

With 70% of the Russell 3000 annual meetings completed, Institutional Shareholder Services (ISS) has taken an early look at the 2019 proxy season. ISS found increases in opposition to director elections and say-on-pay proposals, as well as increases in the number of and withdrawal rates for environmental and social (E&S) proposals relative to governance proposals. In addition, the disparity between the levels of support for E&S proposals and the historically more popular governance proposals has narrowed dramatically.

Business judgement rule and liability of non-executive directors
Grieco e Associati
  • Italy
  • 15 July 2019

Italian corporate law establishes the liability of members of the board of directors of joint stock companies depending on whether they are chief executive officers or executive directors or independent and non-executive directors. Recent Supreme Court of Cassation and Milan Court of Appeal decisions focused on the liability of non-executive directors by affirming that they must be proactive and fulfil their duty to be as informed as possible to ensure a suitable standard of corporate governance.

Caveat venditor – has the pendulum swung too far?
Bodipalar Ponnudurai De Silva
  • Malaysia
  • 08 July 2019

'Caveat emptor' or 'buyer beware' is a familiar concept. The effects and consequences of caveat emptor have been criticised over time and, as a result, commercial law has slowly developed more stringent protection for consumers and buyers. As such, the ramifications of a recent apex court's decision are far reaching. In short, liability can now be imposed on sellers even if the buyer has previously accepted the same product without qualification.

Special rules of representation for limited liability companies
Kubas Kos Gałkowski
  • Poland
  • 08 July 2019

The Commercial Company Code allows representation by a supervisory board or proxy appointed by a resolution of a shareholders' meeting in contracts or disputes between companies and their management boards. In this context, the Supreme Court recently examined whether a limited liability company should be represented by a general partner or its management board when amending a limited partnership agreement, despite the fact that the limited partner was a member of the company's management board.

Is there a business case for environmental social governance?
Cooley LLP
  • USA
  • 08 July 2019

Do companies that ignore long-term environmental or social costs in the pursuit of near-term profits pay another price in foregoing potentially long-term sustainable profit opportunities? A recent business case for environmental social governance from Stanford University's Rock Centre for Corporate Governance suggests that, properly analysed, sustainability can not only affect externalities, but also benefit businesses.

Supreme Court of Cassation examines CEO duties of fairness and transparency
Grieco e Associati
  • Italy
  • 08 July 2019

The Civil Code sets out specific rules which apply in the event that a chief executive officer (CEO) or director has extra-company interests. In the event that such a conflict of interests affects the position of a managing director, they cannot vote in the relevant board of director's resolution on the subject of the conflict. A recent Supreme Court of Cassation Decision has emphasised the duties of transparency and fairness to which company directors and CEOs in Italy must adhere.

Privy Council clarifies Bermuda's '60/40 rule'
Carey Olsen Bermuda
  • Bermuda
  • 01 July 2019

In a judgment which is likely to have wide-ranging implications for local companies subject to the '60/40 rule', the Privy Council recently held that local companies may confer on non-Bermudians "de facto control by commercial arrangements", provided that non-Bermudians have no control over the manner in which directors and shareholders vote.

New PCAOB guidance on auditor communications regarding CAMs
Cooley LLP
  • USA
  • 01 July 2019

The Public Company Accounting Oversight Board recently published new guidance on auditors' communication of critical audit matters (CAMs) in auditors' reports. The guidance includes new frequently asked questions relating to how auditors should describe their principal considerations in determining CAMs, the relationship between CAMs and company disclosures and the treatment of recurring CAMs.

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