Portugal: IPCG to produce new corporate governance code

Responsibility for the governance code to which listed companies are subject is to change. The Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários, has announced that it will no longer produce a governance code and that responsibility for Portugal's governance code will move to the Instituto Português de Corporate Governance (IPCG: the Portuguese Corporate Governance Institute): see here (pdf, Portuguese). The IPCG has said that it will publish and consult on a new code later this year.

Portugal: CMVM's corporate governance code - copy in English available

Last year the Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários, published a new edition of its corporate governance code. A copy of the Code, in English, is now available: see here (pdf).

Portugal: IPCG publishes new corporate governance code

The codes and principles directory maintained by the European Corporate Governance Institute was updated yesterday with a copy, in Portuguese, of the new corporate governance code published by the Portuguese Institute of Corporate Governance (IPCG): see here.

Portugal: CMVM corporate governance code recommendations - copy in English now available

The Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários, published a new edition of its corporate governance code last year: see here (pdf). A copy of the code, in English, is now available: see here (pdf).

Portugal: CMVM publishes new edition of corporate governance code

The Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários, has published a new edition of its corporate governance code. A copy, in Portuguese, is available here (pdf).

Europe: Portugal's golden share in ALP Energia SGPS SA

The Court of Justice of the European Union gave its opinion yesterday in European Commission v Portuguese Republic (Case C‑212/09): see here. The court held that Portugal had failed to fulfil its obligations under Article 56 of the EC Treaty by maintaining its golden share in GALP Energia SGPS SA which gave it, amongst other things, a right of veto regarding the appointment of certain directors and the right to appoint the company's chairman.

Europe: Portugal’s holding of golden shares in Energias de Portugal is contrary to European Union law

The European Court of Justice gave its opinion yesterday in Commission v Portugal (C-543/08), holding that Portugal’s holding of golden shares in Energias de Portugal was contrary to European Union law, such holding being an unjustified restriction on the free movement of capital: see here. A press release is available here (pdf).

Earlier this year the Court of Justice held that the Portuguese State's holding of golden shares in Portugal Telecom, which conferred special control and decision-making rights, constituted an unjustified restriction on the free movement of capital: see here.

Europe: an unjustified restriction on the free movement of capital - golden shares in Portuguese Telecom

In January 2008, the European Commission referred Portugal to the European Court of Justice because it considered that the special rights conferred on the State by its golden shares in Portugal Telecom (PT) discouraged investment from other Member States in violation of the EC Treaty.

Today the European Court of Justice gave its opinion - Commission v Portugal (Case C-171/08) - and supported the Commission's position. The court observed (paras. [60] to [62]):

... the Portuguese State’s holding of those golden shares, in so far as it confers on that State an influence on the management of PT which is not justified by the size of its shareholding in that company, is liable to discourage operators from other Member States from making direct investments in PT since they could not be involved in the management and control of that company in proportion to the value of their shareholdings (see, inter alia, Case C‑112/05 Commission v Germany [2007] ECR I‑8995, paragraphs 50 to 52).

Similarly, the structuring of the special shares at issue may have a deterrent effect on portfolio investments in PT in so far as a possible refusal by the Portuguese State to approve an important decision, proposed by the organs of the company concerned as being in the company’s interests, is in fact capable of depressing the value of the shares of that company and thus reduces the attractiveness of an investment in such shares (see, to that effect, Commission v Netherlands [C-283/04, [2006] ECR I‑9141], paragraph 27).

In those circumstances, it must be found that the Portuguese State’s holding of the golden shares at issue constitutes a restriction on the free movement of capital for the purposes of Article 56(1) EC".

A summary of the decision is available here (pdf). Following Lisbon, Article 56 is now Article 63 in the Treaty on the Functioning of the European Union: see here (pdf).

Portugal: new corporate governance recommendations + other developments

The Portuguese Securities Commission (Comissão do Mercado de Valores Mobiliários) has announced that its Executive Board has approved new recommendations on corporate governance with regard to the criteria for determining directors' remuneration, the control of internal risk and the independence of external auditors: see here for further information.

The Commission has also announced - see here - its approval of a Regulation which will require listed companies to publish details of the remuneration policy for directors and supervisory board members.

Finally, the Commission has formed a panel to assess the quality of corporate governance in Portugal: see here for further information.

Portugal: CMVM proposes amendments to corporate governance code

The Portuguese Securities Commission (Comissão do Mercado de Valores Mobiliários) is seeking views on proposed amendments to its Corporate Governance Code. The consultation ends in early September. For further information see here. 

The protection of minority shareholders in listed companies

The Technical Committee of the International Organization of Securities Commissions established a corporate governance task force in 2005. In 2007 the task force published a report titled Board Independence of Listed Companies. A further report - Protection of Minority Shareholders in Listed Issuers - was published last week and summarises information gathered by the task force concerning the rules designed to protect minority shareholders in eighteen jurisdictions.

The report provides a useful starting point for research but its limitations must be noted: the Task Force did not explicitly require respondents to assess or comment on how the rules were implemented or applied in practice. The eighteen jurisdictions included are: Australia, Brazil, Canada, Germany, Hong Kong, Israel, Italy, Japan, Mexico, the Netherlands, Poland, Portugal, Spain, Switzerland, Thailand, Turkey, the United Kingdom and the United States of America.

Portugal: the Securities Market Commission corporate governance code

The corporate governance codes directory maintained by the European Corporate Governance Institute has been updated to include a copy of the governance code published by the Portuguese Securities Market Commission. The code is available here in English and here in Portuguese.