CSACH, K.: Digital corporate governance in Slovakia. Právny obzor, 105, 2022, special issue, pp. 3-13
https://doi.org/10.31577/pravnyobzor.specialissue.2022.01
Digital corporate governance in Slovakia. The paper focuses on the current trend of digitalisation of decision-making processes. Legal risks associated with the use of digital technologies in facilitating decision-making by corporate bodies and the means to mitigate such risks are brought into attention. The author supports the view that the current Slovak legislation is insufficient for full-fledged virtual shareholders’ meetings but is sufficient for the use of digital means as support or substitute for the decision-making of corporate board members. The general framework of the draft recodification of the Slovak Civil Code allowing associates (members of corporations including civil associations) to participate virtually in meetings of associates of all corporate legal forms is considered an up-to-date solution.
Key words: digitalisation, corporate governance, virtual shareholders’ meeting, corporate e-governance, electronic voting
Introduction
Effective corporate governance requires flexible procedural rules governing the way corporate decisions are made. Slovak corporate law is rigid in terms of decision-making processes. The regulation dates back to pre-Internet times and rules are conceptually built on the physical presence of the persons involved in decision-making. However, this world is coming to an end and nowadays a large part of personal interaction takes place online. Digital technologies are increasingly used as means of searching for information, simplifying its processing, or otherwise supporting decision-making. So far, digital technologies have been replacing human decision-making processes only in exceptional cases. In this article, we will address the possibility of virtual meetings and digitalisation of the voting processes of corporate bodies (1), the digital exercise of other shareholder rights (2) and the use of digital technologies in decision-making by the executive and supervisory bodies (3). We will focus on the limits of the current laws and legal regulations, present possibilities of deploying digital technologies and on the proposal of a new legal regulation in the recodification of private law.
1. Online decision-making by corporate bodies
1.1. Digital technologies facilitating board members' decision-making and virtual board meetings
The technical course of negotiations and decision-making by the collective body of a commercial company is not regulated in detail in Slovak corporate law. The default rule requires personal participation in the meeting. The memorandum or articles of association may permit the members of the executive board or the supervisory board to vote in writing or by electronic means (Sect. 66 Subs. 8 of the Slovak Commercial Code). It is therefore assumed that the decision on the method of communication cannot be taken by the executive or supervisory body of the company itself within their Rules of Procedure but must be taken by the shareholders by amending the fundamental corporate documents. The law does not provide for any additional rules governing electronic communication by members of elected bodies. Deficiencies in data transmission or identification of persons are apparently not considered to be significant here and the obligation to ensure their proper functioning is left to the responsibility of the members of the bodies in question.
1.2. Digital technologies facilitating shareholders' decision-making and virtual shareholders' meetings
Shareholders of a corporations make their decisions mainly in the shareholders' meeting. The shareholders' meeting is the supreme body of the corporation and decides on the most important issues of the corporation. In addition, shareholders may, under
