Multi-national companies need to adapt to local regulations, but also maintain global standards. This is as important for corporate management and culture as for products and services. Our Cross-border guide for group company directors aims to assist international groups with this task and has just been updated. The guide covers 25 jurisdictions and gives an overview of what it means to be a director of a typical subsidiary company under different legal regimes.
Questions about the responsibilities of the directors may arise when groups are involved in cross-border M&A or need to reorganise the business or set up new subsidiaries. Sometimes changes will be driven by political and economic developments, such as Brexit, or the recent focus on corporate structuring used by businesses for tax planning. The Cross-border guide for group company directors can help businesses, for example to compare possible management structures for new subsidiaries or to obtain key information, such as the necessary formalities for directors to make and record company decisions in a particular jurisdiction. Sections on the potential liability of directors and on available indemnities, insurance and protections can also be used to help assess and manage risk.
Even in groups with an established network of subsidiaries, the country-by-country summaries in the Cross-border guide for group company directors can help provide tailored information for directors who are not operating in their own home jurisdiction. While it is generally true that in every country directors owe duties to their company and are expected to carry out these duties with care and loyalty, specific regimes may differ considerably on important points, for example, in the details of how to deal with conflicts between the interests of the directors and those of the company.
In any case, directors' duties are always subject to legal change. A number of countries have in the last few years modernised their company laws significantly. These changes are particularly reflected in the updates made in our Cross-border guide for group company directors to the sections on India, Russia, Singapore and the UAE. In the case of Spain and Hong Kong, the pace of change has now slowed and few additional changes have been made in the last few years. Other countries sections include specific updates worth noting, including the simplification of the rules governing related party transactions in France, the introduction of a flexible new type of company, the SAS, in Luxembourg and changes to the reporting obligations of companies in the PRC.
The publication is available on our Knowledge Portal - please click here to access it.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
