Do the governing bodies have any special duties and responsibilities within the context of COVID-19 events?

Companies’ governing bodies are subject to special duties of care in the management of the risks inherent to the COVID-19 threat. Companies should prepare and implement contingency plans geared at continuing their business and the safety of their employees, shareholders, customers, suppliers and other stakeholders. Whenever possible, companies should create taskforces to monitor, on the one hand, the evolution of contagion and contention of the COVID-19 in close liaison with the health and local authorities and, on the other hand, the economic, financial and commercial impacts that materialize or that could foreseeably impact their business or that of third parties, adjusting their commercial strategies in order to minimize and overcome any issues that may arise.

It is particularly important that such plans be communicated on time to all structures of the companies, implemented, monitored and reviewed, if required. It is equally important that the process of setting up and approving such plans by the company’s decision-making bodies is guided by rational business criteria and duly documented. Members of the governing bodies may be held liable for the absence of such plans or losses arising from the failure to communicate them on time.


Should we reconsider in-person meetings of the corporate bodies?

From the outset of the COVID-19 pandemic, corporate entities have fostered the use of telematic means in all corporate meetings and in some cases exercising the right to vote by correspondence or resorting to unanimous resolutions in writing as a way to minimize the risks associated with in person meetings or gatherings.

For those corporate entities that wish to maintain and holder in person shareholders meetings, Decree-Law 22-A/2021, of March 17 has extended the certain deadlines and set out exceptional and temporary measures necessary in the context of Covid-19 pandemic. As a result, all shareholders meetings that should be held until 30 June 2021, by legal or statutory imposition may be held until such date.

Additionally, as regards the meetings of other corporate bodies, contingency plans may be weighed that avoid physical presence at meetings of at least part of the members or any other measures ensuring that there is enough quorum, including telematic means, by approving any regulations deemed necessary or adequate for such purpose.

In the context of the matters above, joint recommendations have been issued by CMVM (the Securities Market Regulator), IPCG (the Portuguese Corporate Governance Institute) and AEM (the Issuers’ Association), available at:

We point out that the recourse to any public support measures during the pandemic crisis may impose limitations to payment of dividends by the entities receiving any public funds or public sponsored programs. In particular, resorting to the simplified lay-off might, among other consequences, impose restrictions to the profit distributions by the companies that benefit from such support (just as indicated in the section of the simplified lay-off procedure). Also, the distribution of profits, by any means, the reimbursement of shareholder credits or share buy back programs by any entity benefiting from those programs determines the cancellation of any liquidity support measures, such as moratoriums.




This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.