The legal framework for directors' and officers' liability changes considerably as a result of an IPO. For example, the limitation period for breaches of due diligence doubles from five to ten years. An insufficiently well-founded decision, inadequate risk management, organisational negligence in the compliance area - board members of listed companies can be held liable for all of these even if this breach of duty occurred up to ten years ago.
The combination of an extended limitation period and the reversal of the burden of proof makes it clear how important it is to formalise corporate governance systems in the course of an IPO: Only sufficient documentation makes it possible to refute any accusations even after a long time.
In addition, a management report should be prepared in accordance with DRS20 and a corporate governance statement should be issued which includes a declaration of compliance with the German Corporate Governance Code.
Even if a company only issues bonds, it is already considered capital market oriented and must fulfil a number of requirements. If, on the other hand, an issue is planned on a foreign stock exchange, special regulations on corporate governance often have to be observed, which a German company should take seriously.
On the basis of a standardised brief analysis, KPMG provides you with a very specific catalogue of measures that still need to be taken in the area of your corporate governance prior to a capital market transaction. Of course, our experienced advisors will also be happy to support you in their implementation.
Dr. Stefan Otremba
Partner, Risk & Compliance Services
KPMG AG Wirtschaftsprüfungsgesellschaft