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Harmonizing IFN Regulations with Corporate Governance Laws

Understand the legal frameworks for IFNs, roles of managers, and committees as per Law 31/1990 and GO 28/2006 at the Heineken ALB National Conference in 2007.

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Harmonizing IFN Regulations with Corporate Governance Laws

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  1. Präsentation für Heineken

  2. ALB NATIONAL CONFERENCE18 October 2007IFNs Corporate GovernanceA practical attempt to coordinating IFN regulations with Law 31/1990Matei Florea

  3. Conflicting legal requirements / Main legal framework • Government Ordinance 28/2006 regarding certain financial and fiscal measures, as approved by Law 266/2006 ("GO 28/2006") • Law 31/1990 on trade companies, as amended to date ("Law 31/1990")

  4. Who’s who in IFNs • Operative Managers (conducători) under GO 28/2006 • Managers (directori) under Law 31/1990 • Executive Committee Members (membrii ai directoratului) under Law 31/1990 • Operative Managers = ? = Managers / Executive Committee Members • Unclear solution under the latest draft law on IFNs

  5. Operative managers: employees or agents? (I) • Operative managers of IFNs registered also in the Special Register must be employees of the respective IFNs (GO 28/2006) • Managers/members of the executive committee (Law 31/1990): *) may not be employees of their respective companies; *) their relationship with their companies is governed by agency agreements (mandat); *) employment agreements concluded by managers / members of executive committee with the company have been terminated de iure.

  6. Operative managers: employees or agents? (II) • Proposed Interpretation: *) OG 28/2006 is lex specialis and therefore takes precedence over Law 31/1990 *) Operative managers of IFNs registered also in the Special Register must be employees of the respective IFNs • Latest draft law on IFNs: this requirement has been eliminated also as concerns IFNs registered also in the Special Register.

  7. Committees organised by the Board (I) • Committee for risk administration and audit committee must be organised by the board of directors of IFNs registered also in the Special Register (GO 28/2006); • Audit committee in trade companies subject to financial auditing - no longer a requirement for companies having a board of directors (Law 31/1990); • Audit committee organised in trade company subject to financial auditing - still a requirement for companies subject having a supervisory board (Law 31/1990).

  8. Committees organised by the Board (II) • Proposed Interpretation: • OG 28/2006 is lex specialis and therefore takes precedence over Law 31/1990; • All IFNs registered in the Special Register need to have their boards organize audit committees. • Latest draft law on IFNs: • IFNs registered in the Special Register are no longer required to have their board organize any committee • application of Law 31/1990

  9. Thank you!SCHOENHERR SI ASOCIATII S.C.A.ATTORNEYS AT LAW / RECHTSANWAELTE 30 Dacia Blvd, 4th Floor,   RO-010413 BucharestT: +40 21 319 67 90F: +40 21 319 67 92W: www.schoenherr.ro

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