CGOV.15:5.2 - Adapt a method to a controlling-owner transaction

In this constructed case, a corporation has borrowed a method focused on challenging managers’ performance assumptions. It now considers buying an asset from its controlling shareholder.

The supplied governing rules require an unconnected valuation, disclosure to affected shareholders and a decision by eligible directors. The borrowed performance-review method supplies none of those contributions. Its familiar scorecard therefore leaves the transaction’s preparation incomplete.

The practitioner uses CGOV.6–CGOV.8 and CGOV.12 to obtain the applicable conflict, review, information and protection contributions and connects them to the corporate decision method. The adapted way of preparing this class of transaction adds operations and continuation conditions; it is more than a renamed performance review.

The resulting method remains available for that class of matter. The simpler performance-review method can remain useful elsewhere.