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?

The Decree-Law 10-A/2020, of 13 March 2020 was enacted, extending the deadline for holding General Meetings until 30 June 2020 which, by legal or statutory imposition, should be held until such date. Although it did not result directly from the law, then prevailing circumstances, in combination with this law, has warranted postponing meetings already called or even to revoke calls so as to minimize the risks associated with holding in-person shareholder meetings. 

Despite the end of the state of emergency, for as long as the pandemic lasts for any resolutions that must be approved by general meetings, companies should consider using telematic means, exercising the right to vote by correspondence or, alternatively, passing of unanimous resolutions in writing. The possibility of using such means should be assessed on a case-by-case basis as it is subject to the articles of association of the company and predicated on the existence of internal regulations, means and resources ensuring the reliability of communications.

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.