PORTUGAL Law and Practice Contributed by: Susana Braz, Jaime Costa and Tomás Simões, Santiago Mediano e Associados, SP, RL
them an excellent choice for private, closely held companies where shareholder changes are infre - quent and anonymity is not a primary concern. In any event, under Portuguese law, it is possible to convert a company from one type to another, provided that all legal conditions are fulfilled and there is nothing in the company’s by-laws pro - hibiting such a transformation. 1.2 Sources of Corporate Governance Requirements Main Sources The principal sources of corporate governance requirements for companies in Portugal are the Companies Code ( Código das Sociedades Com- erciais or CSC) and the Portuguese Securities Code ( Código dos Valores Mobiliários or CVM). There are, however, specific provisions for: • Listed Financial Institutions: The recommen - dations issued by the Portuguese Central Bank (BdP) play a central supervisory role in overseeing the governance models adopted by these institutions. Institutions must peri - odically evaluate their governance model to identify opportunities for improvement and must take the necessary measures to correct any detected deficiencies. In the exercise of supervision, and adhering to the principle of proportionality, the Bank of Portugal main - tains regular contact with the members of the governing bodies of the institutions it super - vises. If deemed necessary, it may attend the meetings of these bodies in person. • Public Interest Entities: The legal regime applicable to public companies ( Regime Jurídico do Setor Público Empresarial or RJSPE) sets out rules for the formation, organisation, and governance of public com - panies, as well as for the exercise of powers
inherent to the ownership of shareholdings which aim to ensure efficiency, transparency, and accountability in the management of public companies. • Public Limited Sports Companies ( Socie- dades Anónimas Desportivas or SADs): The corporate governance of Portuguese SADs is set out by Law 39/2023 of 4 August 2023, which promotes transparency in the manage - ment of SADs by setting out, among others, the obligation to disclose annually to the organising sports bodies the identity of the members of the management body. The Por - tuguese Institute of Sports and Youth ( Insti- tuto Português do Desporto e Juventude or IPDJ) is the supervisory entity responsible for verifying the suitability and any potential con - flicts of interest of qualified investors, direc - tors, and managers. Soft Law Further, the Securities Market Commission ( Comissão do Mercado de Valores Mobiliários or CMVM) has been issuing recommendations on corporate governance since 1999, which ini - tially only applied to listed companies, and that have been compiled in the Corporate Govern - ance Code ( Código de Governo das Sociedades or CGS) by the Portuguese Institute of Corporate Governance. This code’s principles and recom - mendations pertain to the body of “soft law” and, thus, are not legally binding and cannot be enforced before a court. In 2001, CMVM Regulation No 7/2001 adopted the “comply or explain” principle, whereby com - panies are required to disclose whether, and to what extent, they comply with the recommen - dations or to explain why they do not and pro - posed that companies issuing shares admitted to trading on a regulated market must annually disclose information on various aspects related
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