Draft decree regulating conflict of interest and competition with the company and the principle of deference to business judgment

On October 17, 2023, the Ministry of Industry, Commerce and Tourism published on its website the draft decree "By which Article 23 of Law 222 of 1995 partially regulates Article 23, regarding conflict of interest and competition with the company by the administrators, and the application of the principle of deference to business criteria"; receiving comments from citizens and value groups, which may be sent to the e-mail cfranco@supersociedades.gov.co, from October 18 until November 1, 2023.

In its supporting memorandum it is noted that, after more than 14 years since the entry into force of Decree 1925 of 2009, "Whereby Article 23 of Law 222 of 1995, and other concordant rules, is partially regulated in relation to conflict of interest and competition with the company by the directors of the company", currently compiled in the Single Regulatory Decree 1074 of 2015; the aforementioned regulations must be updated.

Through the aforementioned bill, the entire Chapter 3 of Title 2 of Part 2 of Part 2 of Book 2 of the Sole Regulatory Decree 1074 of 2015 would be replaced.

The content of the project is as follows:

Concept of conflict of interest.
Persons who are considered to be related to the administrator for the purpose of determining the conflict of interest.
Competition with the company.
Procedure in cases of conflict of interest or competition with the corporation.
Operations in corporate groups and between controlling companies and subordinates or subordinates among themselves.
Deference to the criterion of corporate discretion of the administrators.