Roger Barker

In the wake of a pan-European report offering guidance and insight into the changing environment shaping European directors’ duties and liabilities, a stakeholder workshop, conducted by Roger Barker, chair of the ecoDa/AIG working group and director of corporate governance, IoD UK, will be held on December 11.

The workshop is being held in collaboration with the Malta Institute of Management and the Malta Financial Services Authority.

Institute of Directors Malta Branch chairman James Satariano said the workshop would examine how the regulatory and political scrutiny of boards led to an increase in the risks and potential liabilities faced by individual directors.

It will help board members understand the extent of their liabilities in this complex and increasingly challenging new world and highlight how European corporate governance initiatives are linked to Malta’s competitiveness.

Louis de Gabriele will give the local dimension, while ecoDa policy committee member Edwin Ward will act as moderator.

The nature of directors’ duties and liabilities and the manner in which they are enforced can be affected by the differences in board structures across Europe. Complex supply chains with companies operating in many countries mean that board members have to cope with different legal frameworks and business cultures, including that of Malta.

“This IoD workshop highlights the specific risks faced by directors in individual European jurisdictions and provides a rich variety of cross-border and national case studies,” Mr Satariano said.

“Malta is an integral part of Europe, our financial services jurisdiction is a respected onshore EU jurisdiction and our role as an OECD White-List country is significantly dependent on the quality of our corporate governance standards.”

Dr Barker said the recent report analysed and helped board members manage risks. It covered a large variety of situations like bankruptcy, insolvency, criminal liabilities and shareholder activism. It also provided directors with solutions aimed at keeping them out of the firing line of litigators and regulators.

“This report is a wake-up call for professional board members who have to ensure that they have the appropriate skills and knowledge before considering a non-executive position. The assumption that a director can’t be liable if he or she acted in good faith is changing. It’s no longer going to be a reasonable defence for a European board member to say ‘I didn’t intend for this to happen’. Instead they must be able to state: ‘I implemented a good system and reasonable processes to guard against this’.”

Mr Satariano said board members should not underestimate the changing nature of risks they faced. Well-informed directors who have their potential personal liability in mind will be better placed to navigate the challenges of such an increasingly dense, legal and physical risk-based environment.

“Our workshop will help with that, while putting forward propositions which clearly show that Malta’s continuing competitiveness is highly dependent upon reaching and surpassing existing European standards. We have been saying this for 15 years at IoD Malta. This workshop and the accompanying report make this another concrete reality. No director should miss attending.”

To register for the workshop being held at the MFSA, e-mail ssl@go.net.mt or call 2133 6507. IoD and MIM members benefit from a reduced fee of €45, while non-members may attend at €55.