Shareholder governance consultation: preventing decision deadlock

Situations relevant to the shareholder governance consultation

• Two equal shareholders find that their articles of association provide no way out in the event of disagreement.
• A family company is welcoming a new generation, and its decision-making rules no longer reflect actual roles.
• The founders of a young company wish to set their operating rules before any tension arises.
• A company is preparing to open its capital and must reconcile the rights of new shareholders with those of the founders.
• An old shareholders’ agreement no longer reflects changes in the business or the current distribution of capital.

Process

1. Collection of the capital structure, roles and existing rules. The firm first receives the articles of association, any shareholders’ agreement and the description of roles. This phase takes place asynchronously, through the transmission of documents.
2. Review of decision areas and sources of deadlock. The analysis then identifies the decisions that require the agreement of several shareholders. It thus identifies the configurations in which a lack of agreement paralyses the company.
3. Examination of prevention and amicable settlement mechanisms. This step reviews the mechanisms already provided for and those that are missing. It favours arrangements that are set before any disagreement.
4. Guidance on the content of a governance charter using Template P-14. Template P-14 serves as the basis for defining the content of the charter. Beforehand, the IA-04 interactive assistance supports its completion, without issuing any opinion.
5. Videoconference or written debrief. The 60-minute videoconference offers a synchronous exchange, recorded in a session record. Conversely, the guidance note constitutes an asynchronous debrief.

Deliverable

The shareholder governance consultation results in a videoconference record or a guidance note. The document first lists the points of deadlock identified in the existing rules. It then presents the possible prevention and amicable settlement mechanisms. Finally, it describes the content of a governance charter suited to the company. The note reaches the client five working days after receipt of complete information. The record, for its part, sets out the points examined during the videoconference.

Prerequisites

The consultation requires the transmission of the company’s articles of association and, where one exists, the shareholders’ agreement. The capital structure and the description of each shareholder’s role supplement these documents. The time frame runs from receipt of all these items.

Frequently asked questions

How is the choice made between the videoconference and the guidance note?

The 60-minute videoconference favours direct exchange on roles and decision areas. The guidance note is suitable, by contrast, when the shareholders wish to have a shared written record. In both cases, the content covers the points of deadlock, the possible mechanisms and the charter. The common consultation form records the chosen format.

What is the time frame for the shareholder governance consultation?

The videoconference takes place in a slot set at least 7 days after booking (priority slot possible within five working days), Tuesday to Thursday. The guidance note is delivered within five working days. These time frames run from receipt of a complete file. They nevertheless remain indicative, in accordance with the common rules of the catalogue. A missing document therefore postpones the starting point of the time frame.

Is the consultation suitable for a conflict that has already arisen?

No. The consultation focuses on prevention, since useful mechanisms are set before any disagreement. Mediation of an open conflict remains outside its scope. Likewise, ASKonsult does not represent any shareholder. When a crisis situation already affects the company, the crisis consultation is then the appropriate entry point.

Which withdrawal rules apply?

With regard to a consumer client, Law No. 31-08 provides for a seven-day right of withdrawal. A consultation scheduled at least seven days after booking preserves this right. Conversely, a consultation scheduled less than seven days away entails immediate performance, without a right of withdrawal. ASKonsult then obtains the consumer’s express consent, after providing information on these consequences.

Do the documents transmitted remain confidential?

ASKonsult treats as confidential the information and documents transmitted by the client. They are exchanged through the secure area, and their use is limited to the purposes of the consultation. This obligation survives the end of the relationship. The client is likewise bound with regard to the non-public tools and deliverables it receives.

What role does the IA-04 interactive assistance play?

The IA-04 interactive assistance supports the completion of Template P-14. It explains the sections, clarifies what is expected and checks the consistency and completeness of the answers. However, the assistance issues no opinion and does not assess any particular situation. Its outputs do not constitute a deliverable: the firm then analyses the work prepared and validates it.

What follow-up can extend the consultation?

When the charter calls for structured work, the Shareholder governance charter package (K-10) takes over. A recurring need points rather to the Executive subscription (A-03). In addition, the leadership transition consultation (C-19) addresses related questions. Finally, the crisis consultation (C-17) handles situations in which deadlock has already taken effect.

Out of scope

The shareholder governance consultation does not include drafting the articles of association or the shareholders’ agreement. Such drafting falls to an authorised professional, to whom ASKonsult refers the client. Mediation of an open conflict also remains outside the service. Finally, ASKonsult does not represent any shareholder, whatever the situation.