MEXICO Law and Practice Contributed by: Carlo Cannizzo, Marco Cannizzo, Stefano Amato, Enrique García and Paloma Iglesias, Cannizzo
7.3 Producing Financial Statements In general terms, bidders do not need to produce financial statements in their disclosure documents. 7.4 Transaction Documents Private companies are not required to disclose trans - action documents in full. In the case of public compa - nies, the Issuers’ Provisions do provide for the delivery of copies of contracts, acts or prior agreements with other buyers, shareholders and directors of the issuer, that are related to the issuer, its shares or the pur - chase offer, including the existence of facts or verbal agreements and their result and the draft brokerage agreement to be entered into by the offeror and the intermediary and through which the purchase offer will be made. The main responsibilities or duties of directors in the event of a business combination of private compa - nies will derive from the LGSM, the by-laws of each of the companies involved, the meetings at which each of them agrees to merge and the respective merger agreement. Public companies, both investment promotion corpo - rations (s ociedades anónimas promotoras de inver - sión ) and stock exchange corporations ( sociedades anónimas bursátiles ), may adopt for their administra - tion and supervision the same or a different regime regarding their integration, organisation and opera - tion. The directors (who must act in good faith and in the best interests of the company and the legal entities it controls, and must not fail in their duty of diligence) and the chief executive officer of the com - pany may be subject to the provisions relating to the organisation, functions and responsibilities set forth in the LMV; otherwise, they will be subject to the regime of organisation, functions and responsibilities set forth in the LGSM. 8. Duties of Directors 8.1 Principal Directors’ Duties In accordance with stock exchange legislation, the members of the board of directors must perform their duties in such a way as to create value for the benefit
of the company without favouring a particular share - holder or group of shareholders. 8.2 Special or Ad Hoc Committees It is common for boards of directors to establish spe - cial ad hoc committees in business combinations, including those that may be used when one or more directors have a conflict of interest. In the latter case, additionally, the members of the board of directors who have a conflict of interest in any matter must abstain from participating in the deliberation and vot - ing on the respective matters. 8.3 Business Judgement Rule In the case of public companies, the Mexican courts assume that the members and secretary of the board of directors of publicly traded companies, who have a conflict of interest in any matter, will abstain from participating in the deliberation and voting on such matters. The same happens in the case of private companies, where the law presumes that directors who have an interest opposed to that of the company must declare it to the other directors and abstain from all delibera - tions and resolutions, considering that a director who contravenes this provision will be liable for the dam - ages caused to the company. 8.4 Independent Outside Advice In the case of private companies in Mexico, external auditors are usually a form of independent outside advice, while in the case of public companies, the external auditor of the company may also be called to the meetings of the board of directors, as a guest with a voice but without a vote. Auditors must abstain from being present with respect to those matters on the agenda in which they have a conflict of interest or that may compromise their independence, and in many contexts an opinion issued by them will be required. Likewise, it will be important to consider the require - ments set forth by the stock exchange legislation regarding the members of the board of directors who must comply with the “independence” require - ment and who must be selected for their experience, capacity and professional prestige, also considering that, due to their characteristics, they may perform
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