MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Mariana Santillán Trejo and Rebeca Sanchez, Aziz & Kaye Abogados, S.C.
considered a violation of the director’s duty of loyalty. Internal control and/or auditing committees are typically in charge of overseeing matters related to conflicts of interest, paying special attention to transactions with related parties. As a good practice, the Code recommends that companies have structures in place to provide anonymous tips regarding conflicts of interests. 4.6 Legal Duties of Directors/Officers Directors and officers are required to act accord - ing to the company’s by-laws and all relevant laws and regulations. The duties of officers may also be outlined in an agreement. Directors are obliged to maintain confidentiality regarding any matters or information to which they gain access in the course of their duties. However, exceptions to this rule exist when such information is requested by judicial or adminis - trative authorities. This confidentiality obligation is valid throughout their tenure and for one year afterwards. Furthermore, members of the board of directors are jointly liable for the following: • shareholders’ contributions; • adhering to all requirements for the distribu - tion of dividends; • establishing and maintaining accounting, control, recording, filing, and information sys - tems, as mandated by law; and • faithfully executing the resolutions adopted by the shareholders’ meeting. Additionally, directors are jointly and severally liable with their predecessors for any known mis -
conduct that they do not report in writing to the statutory auditor. In publicly listed companies, the members of the board of directors are also expressly bound by the duty of care and the duty of loyalty. Under the duty of care, the members of the board of directors are required to perform their duties diligently, in good faith, and in the best interests of the company. Members of the board of directors are considered to have breached their duty of care when they: • refrain from attending meetings of the board of directors, and any committees to which they belong, and their absence prevents the body from legally convening, unless by justi - fied cause as determined by the sharehold - ers’ meeting; • withhold relevant information necessary for proper decision-making by the board or committees, unless legally or contractually obligated to maintain confidentiality; or • fail to fulfil their obligations set forth in the company’s by-laws or the applicable law. Members of the board of directors breach their duty of loyalty when, among other examples, they: • obtain financial gains for themselves or facili - tate them for third parties, including specific shareholders or shareholder groups without legitimate cause and due to their position; • vote in the board of directors’ meetings with a conflict of interest; • do not disclose conflicts of interest; • intentionally favour a specific shareholder or group of shareholders within the company to the detriment or prejudice of the other share - holders;
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