Following the pandemic—five years behind us now—a growing trend accelerated: moving corporate governance into digital environments. Today, the Companies Law and other applicable regulations allow Boards, Shareholders’ Meetings, and Directors to meet, deliberate, and decide without ever setting foot in a meeting room. But is the business ecosystem ready for a fully virtual operation?
The Companies Law, for several years now, has allowed hybrid or fully remote meetings. The key lies in digital traceability: electronic meeting notices, real-time identity verification, session recordings, and submission of votes by email or through online platforms. The minutes—electronically signed and backed by the recording—carry the same legal validity as their physical equivalent.
In practice, this requires three fundamental pillars: (i) secure technological infrastructure; (ii) updated corporate governance; and (iii) digital training and culture.
Regarding the first point, companies must have secure technological infrastructure. Merely having access to a videoconferencing platform is not enough; it is essential to have robust systems that allow participant authentication, full recording of sessions, and secure storage of digital files.
The Law on Electronic Commerce, Electronic Signatures, and Data Messages (the “Electronic Commerce Law”) establishes key principles and obligations for the security of technological infrastructure:
Data protection and confidentiality: The law guarantees the confidentiality of data messages, penalizing electronic intrusion and the illegal transfer of information. Companies must implement technical and organizational measures to protect personal and corporate data, ensuring that only authorized persons have access to such information.
Integrity and preservation of information: Likewise, the Electronic Commerce Law requires that data messages and electronic documents maintain their integrity and remain accessible for future consultation. This entails using systems that ensure the immutability and traceability of information, as well as keeping records of access, origin, destination, date, and time of messages, among other elements.
Electronic signature security: The law regulates the creation and use of electronic signatures, requiring reliable, secure, and tamper-proof methods for authentication and authorship of documents. The infrastructure must ensure that electronic signatures remain under the exclusive control of their holder and that their verification is technically robust.
Prevention of fraud and cyberattacks: The Electronic Commerce Law also recognizes the legal validity of data messages and establishes that their effectiveness depends on the security of the systems used. It further imposes responsibilities on certification entities and users to prevent the misuse of electronic signatures and manipulation of information.
In practice, this means that companies must invest in platforms that meet international security standards, conduct regular audits, maintain backup and update systems, and train users in identifying cybersecurity risks. It is advisable to have technical support during meetings, run preliminary tests to ensure connectivity for all participants, and establish incident-response protocols for security breaches.
Secondly, companies must maintain updated corporate governance. The Companies Law requires that bylaws be expressly adapted to the digital reality, clearly regulating procedures for convening meetings, verifying identity, establishing quorum, and voting in virtual environments. The following aspects are particularly relevant: (i) meeting notices, (ii) identity verification, and (iii) meeting minutes.
Meeting notices must be sent by email at least five days in advance (or twenty-one days for publicly traded companies). The bylaws may also provide for complementary means, such as publication on the corporate website or social networks.
Verification of the identity and virtual presence of partners or shareholders, as well as the maintenance of quorum and the voting process, must be carried out in a reliable manner and properly recorded, whether through confirmation emails, digital recordings, or any other valid evidentiary means. The legal representative is responsible for keeping the email registry updated and ensuring that notices and communications reach all partners or shareholders.
The minutes of the meetings must be prepared and signed (physically or electronically) within the legal deadlines, and may be archived digitally or even on blockchain, ensuring information immutability and preservation. Failure to comply with these procedures may render the resolutions adopted null and void. Furthermore, the law allows for express waiver of notice or attendance through digital communication and provides mechanisms for adopting resolutions without a formal meeting, provided that traceability and unanimous shareholder consent are ensured. All of this reinforces the need for corporate governance to include clear, updated rules for digital management, ensuring transparency, equitable participation, and legal certainty in corporate decision-making.
The transition to digitalization requires that managers, partners, and shareholders be properly trained in the use of technological tools, electronic signatures, and remote voting protocols. It is essential to foster a digital culture that encourages active and responsible participation, minimizing errors such as misdirected emails, missed confirmations, or misunderstanding of virtual procedures. Training should be ongoing and tailored to participants’ needs, including virtual meeting simulations and practical guides for handling electronic documents. Mistakes in these processes—such as lacking a valid electronic signature or failing to submit a vote—may result in nullified decisions.
Ecuadorian legislation already provides a solid framework for 100% virtual shareholders’ and partners’ meetings and their electronic signatures; the ball is now in the companies’ court. Adopting technological solutions, updating bylaws, and training participants are essential steps to embrace digitalization without jeopardizing the validity of corporate decisions. Are we ready? Those who anticipate the change will not only comply with the law but also gain agility and transparency in corporate management.
Author:
Adriana Lasso, Senior Associate
Adriana practices in the corporate area and has assisted international clients in multilateral transactions, mergers and acquisitions, financing, and project management.
She provides legal advice to national and international companies on corporate, labor, and competition matters, focusing on conflict prevention and compliance in the execution of their business operations.