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COVID-19 – key considerations for Belgian companies

2 April 2020

Christophe Tans

Managing Director Belgium

Christophe Tans

Managing Director Belgium

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Since 18 March 2020, the measures taken by the Belgian government to flatten the curve and slow down the spread of COVID-19 have been increased. Travel restrictions and rules on social distancing not only have an impact on our daily life, it also affects how companies are organising their activities. Board members of Belgian companies should increase their attention to handle these circumstances. In this update, we highlight the key considerations and walk you through the most efficient ways of maintaining your corporate housekeeping.

Duty of the board of directors in relation to COVID-19

The new Belgian companies code provides that when serious and coherent facts may put the continuity of the company at risk, which can be considered as such under the impact of COVID-19, the management body must deliberate on the measures to be taken to safeguard the continuity of economic activity for a minimum period of 12 months.

  • Proactively assessing the potential impact of COVID-19, short-term and long-term.
  • Perform risk assessments and ensure monitoring of risk management and control systems. Good corporate governance strikes a balance between financial performance and the control and prevention of risk. Due to COVID-19, the control and prevention of risk are most likely to prevail.
  • Assessment of possible disruption of services provided by third parties which dispense essential services to the company.
  • Keep records of decisions/minutes, communication and actions taken in connection with the impact, as the case may be, of COVID-19. Note that a board might need to prove that it did everything in its power to reasonably mitigate the impact of COVID-19. The board needs to show that it properly fulfilled its duties and acted in the best interest of the company taking into account the interests of relevant stakeholders.
  • List (potential) financial consequences as a result of COVID-19, the board will need to demonstrate it understands the company’s ability to serve its debts. The Belgian companies code provides tools to measure the liquidity of the company.

Organising board and shareholders meetings under COVID-19

The Belgian Minister of Justice is preparing a series of Royal decrees which will be published in the coming days, providing the flexibility companies need to hold shareholder and board meetings.

  • General shareholders meetings can be organised if they meet under conditions compatible with the COVID-19 measures and should still allow shareholders and members to exercise their voting rights and ask questions. The management body can decide that the shareholders or the members may only exercise their voting rights remotely, whether in combination with proxy voting, through a person appointed by the management body to act as proxy holder
  • General meetings can be postponed until the situation returns to normal. General meetings which have been or must be convened before 19 April 2020 can be held later because of the COVID-19 restrictions, until 10 weeks after the deadline, which in most cases is 30 June 2020. 
The possibility to convene meetings in writing or electronically remains.
  • Finally, the board may deliberate and decide (if necessary, by a majority) by means of electronic communication that allows for discussion. It’s also specified that the board may, in all circumstances, make unanimous decisions in writing. Hence the board can make decisions without a physical meeting and the execution of documents can also be conducted digitally by means of electronic signatures.

Next steps: convening board meetings

To satisfy these requirements and ensure the highest standards of corporate governance, Intertrust-appointed Directors/Managers will be convening board meetings in the coming days to formally adopt measures and to perform the aforementioned risk assessment. As a key stakeholder in the functioning of the underlying business of your Belgian company, you’ll be contacted in due course to ascertain your availability to participate in these meetings and a formal agenda will be shared with you.

Thank you for your understanding and cooperation.