The role and obligations of non-executive directors under Maltese law

Abstract

During the last two decades, the corporate governance debate has gathered momentum in Europe. It was nurtured in its infancy, through the publication of the American Law Institute’s Principles of Corporate Governance in 1994, the United Kingdom’s Cadbury Committee Report in 1992, together with the numerous corporate governance codes that spread throughout Europe; Malta being no exception. Although there is no strict definition of the term ‘corporate governance’, its wider spectrum has been said to engulf practically anything that concerns the manner in which companies, listed or not, are governed, and includes inter alia, directors’ duties, minority rights and creditor protection. The issue that occupies a central post within the sphere of corporate governance is that of ‘corporate control’. This brings to the forefront all of the persons, whether natural or legal, that work to embody the company’s will and life strategy. Indeed, this broad spectrum of control finds one interweaving through several items of importance, among which are the role and rights of shareholders; the composition and duties of the board of directors, employees and their involvement within the company’s governance, and the interaction between all of these stakeholders.