The Commercial Code (Decree-Law no. 1/2022, May 25, which came into force on September 22, 2022) introduced more flexible solutions regarding the corporate governance structure of companies, especially with regard to the body responsible for supervising the company.
In this sense, commercial companies classified as “medium-sized companies” (employing between 31 and 100 workers and having an annual turnover of more than MZN30,000,000.00 to 160,000,000.00); large companies (employing more than 100 workers and having an annual turnover of more than MZN160,000. 000.00), or a company issuing securities (e.g: public limited companies, investment funds and private limited companies that issue bonds), are currently legally entitled to choose between having (i) a completely independent Single Audit Board appointed by the General Meeting to monitor and supervise the actions of the Board of Directors attached to the shareholders or (ii) a relatively independent Audit Committee appointed and set up by the General Meeting to monitor and supervise the management of the Company, attached to the Board of Directors. The choice of one or the other system has different consequences, considering that membership of each body obeys its own rules, appropriate to each of the solutions.
The creation of this flexible regime opens up a window of opportunity that allows commercial companies to optimize their Corporate Governance Structure, reduce redundancies and rationalize costs by opting for one of the options, taking into account, among other things, that the overwhelming majority of companies (especially those operating in the financial sector) adopt a governance system that includes both bodies simultaneously, while both are vested with essentially the same supervisory powers and duties.
When choosing between one solution or the other, it is recommended that attention be paid to the independence of the members who make up the body, bearing in mind that, while the Audit Board must necessarily be made up of independent members who are outside the company, the Audit Committee can be made up of non-independent members (with institutional interests) of the Board of Directors. It is also worth noting that the rules governing the functioning of the Audit Committee allow for better monitoring of the development of business and the life of the company, considering that the members of this body, in addition to the obligation to meet every 2 months, must attend meetings of the Board of Directors, including those of the Executive Committee where the accounts for the year are assessed.
(i) Which option is best suited to your company?
(ii) Have you updated the Terms of Reference of the Audit Committee?
(iii) Está pronto para realizar encontros ordinários de 2 em 2 meses?
Por: Ali Salustiano J. Ubisse
