52 / 72
Markets and Securities Services |
Luxembourg
50
Management committee
The extension of delegation possibilities,
in particular the possibility of setting up
management committees, is good news for
the investment fund industry. Indeed, the
Company Law Reform seems to fill in the gap
that existed between corporate law and the
concept of management committee as it is
known in the fund-specific legislation, which
provides that management companies or AIFMs
must be managed by at least two conducting
officers who together form the management
committee. Under the fund-specific legislation,
such management committee is vested with an
autonomous power of initiative, decision and
control similar to that of a board of directors.
Under the Company Law Reform, the articles
of association may authorise the board of
directors to delegate its management powers to
a management committee. Such management
committee will be considered to be a corporate
body of the company. It will be vested with the
broadest powers of management, subject to
general policy matters of the company and all
the acts reserved to the board of directors by
virtue of other provisions of the law. Where a
management committee is instituted, the board
of directors will assume the supervisory role.
The members of the management committee
will be subject to the liability regime applicable
to directors for management faults and
breaches of the articles.
Up to now, the question of the position of
conducting officers under the 1915 Law
was not clear. Formalising the management
committee’s appointment under the 1915 Law
by appointing conducting officers as delegates
for the daily management was a first option.
While such appointment gave the delegate the
power to represent the company in dealings
with third parties in all actions included in
this management concept without the need
for a general or special power of attorney,
it did, however, raise certain difficulties
from the regulatory standpoint in respect
of the compatibility of the concept of daily
management with the functions of conducting
persons. The concept of daily management,
as defined in Luxembourg case law, is linked
to the mere execution of the line of conduct
set out by the board, without any real power
of own initiative as the decisions that
they must take are only the “result and
the consequence of decisions taken earlier