CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
In Cabo Verde, corporate governance requirements are derived from laws and regulations, recommenda - tions and internal rules set forth by companies them - selves. Laws and Regulations These contain the majority of corporate governance rules and requirements: • The Commercial Companies Code (CSC) approved by Legislative Decree No 2/2019. • The Securities Code in its latest version approved by Law 101/IX/2020. • The Banking Law approved by Law No 62/ VIII/2014. Recommendations Listed companies and companies operating in the banking and financial sector are subject to additional recommendations issued by corporate governance codes, to which they must refer. They must also take into consideration recommenda - tions issued by sectoral regulatory entities, such as the Central Bank of Cabo Verde or the Multisectoral Economic Regulatory Agency. Internal Rules Companies may adopt internal rules, such as by-laws, board internal regulations, codes of ethics or of con - duct which set forth specific corporate governance rules and requirements. In Cabo Verde, listed companies are subject to man - datory corporate governance requirements and rec - ommendations. First of all, only companies organised as public limited companies ( sociedades anónimas or SAs) are authorised to trade their shares on a regu - lated market. To promote a high corporate governance standard, the Securities Code contains corporate governance standards, especially with regard to compliance with the duty of information. Companies must produce annual information on corporate governance, in the following terms:
• Capital structure, including indication of shares not admitted to trading, different categories of shares, rights and duties inherent to them and percentage of capital that each category represents. • Possible restrictions on the transferability of shares, such as consent clauses for sale, or limita - tions on share ownership. • Qualified holdings in the company’s share capital. • Identification of shareholders holding special rights and description of these rights. • Control mechanisms provided for in a possible system of employee participation in capital, to the extent that voting rights are not exercised directly by them. • Possible restrictions on voting rights, such as limi - tations on the exercise of voting depending on the ownership of a number or percentage of shares, deadlines imposed for the exercise of voting rights, or systems for highlighting rights with patrimonial content. • Shareholder agreements that are known to the company and may lead to restrictions on the trans - fer of securities or voting rights. • Rules applicable to the appointment and replace - ment of members of the management body and amendments to the company’s statutes. • Powers of the management body, particularly with regard to decisions to increase capital. • Significant agreements to which the company is a party and which come into force, are amended, or terminate in the event of a change in control of the company following a public takeover bid, as well as the respective effects, unless, by their nature, their disclosure would be seriously detrimental to the company (although the company may be spe - cifically obliged to disclose such information due to other legal imperatives). • Agreements between the company and the mem - bers of the management body or employees that provide for compensation in the event of the employee’s resignation, unfair dismissal or termi - nation of the employment relationship following a public takeover bid. • Internal control and management risk systems implemented in the company. The following mandatory corporate governance mechanisms are also envisaged in these companies:
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