In a unanimous decision on Sept. 12, 2023, the Mexican Senate has approved a draft Decree to reform certain sections of the General Law of Commercial Companies (Ley General de Sociedades Mercantiles or LGSM). This revision is indicative of an evolving approach to corporate governance that incorporates technology and reflects the modern-day business environment.
The aim of this reform is to legally recognize, and therefore regulate, the realization of virtual partners and shareholders meetings, and resolutions conducted over virtual platforms, a feature known as telematics within the region. This amendment may very well offer a solution for corporations grappling with the challenge of convening shareholders under COVID-19 restrictions, among other constraints.
Across the globe, jurisdictions have been compelled to reassess traditional methods concerning governance meetings. This potential shift towards recognizing virtual platforms as legally valid spaces for shareholders to convene and make board decisions comes as a welcome development, as it offers flexibility, reducing logistical burdens, and the potential to improve overall meeting attendance.
However, the introduction of such regulations also warrants a heightened focus on security, privacy, disruption risks and inclusivity of these digital environments. Careful consideration must be taken for all stakeholders, ensuring equal access and participation capabilities for all shareholders, irrespective of their technological prowess or resources.
More details regarding the clauses being amended and the implications this could have on Mexican corporations and their governance practices will be insightful, but Amended Mexico’s General Law of Commercial Companies represents a progressive step in securing a more adaptable and resilient legal framework for commercial companies.
For more information on this, Holland & Knight LLP’s report provides additional context and expert analysis. Please note that this information is subject to change as resolutions pass and legal circumstances evolve.