| DB 2016 Rank | 49 | DB 2015 Rank | 46 | Change in Rank |
 -3
|
|---|
The indicators below describe three dimensions of investor protection: transparency of transactions (Extent of Disclosure Index), liability for self-dealing (Extent of Director Liability Index), shareholders’ ability to sue officers and directors for misconduct (Ease of Shareholder Suits Index) and Strength of Investor Protection Index. The indexes vary between 0 and 10, with higher values indicating greater disclosure, greater liability of directors, greater powers of shareholders to challenge the transaction, and better investor protection.
| DB 2016 Rank | 49 | DB 2015 Rank | 46 | Change in Rank |
-3
|
|---|
| DB 2016 DTF (% points) | 60.00 | DB 2015 DTF (% points) | 60.00 | Change in DTF (% points) | 0.00 |
|---|
| Indicator | Armenia | Europe & Central Asia | OECD high income |
|---|---|---|---|
|
Strength of minority investor protection index (0-10)
|
6.0 | 6.2 | 6.4 |
|
Extent of conflict of interest regulation index (0-10)
|
6.3 | 6.1 | 6.3 |
|
Extent of disclosure index (0-10)
|
5.0 | 6.7 | 6.4 |
|
Extent of director liability index (0-10)
|
6.0 | 4.9 | 5.4 |
|
Ease of shareholder suits index (0-10)
|
8.0 | 6.7 | 7.2 |
|
Extent of shareholder governance index (0-10)
|
5.7 | 6.3 | 6.4 |
|
Extent of shareholder rights index (0-10)
|
9.0 | 7.2 | 7.3 |
|
Extent of ownership and control index (0-10)
|
2.0 | 5.5 | 5.6 |
|
Extent of corporate transparency index (0-10)
|
6.0 | 6.1 | 6.4 |
| Answer | Score | |
|---|---|---|
| Extent of conflict of interest regulation index (0-10) | 6.3 | |
| Extent of disclosure index (0-10) | 5.0 | |
| Which corporate body can provide legally sufficient approval for the Buyer-Seller transaction? (0-3) | Board of directors excluding interested members | 2.0 |
| Is disclosure by the interested director to the board of directors required? (0-2) | Existence of a conflict without any specifics | 1.0 |
| Is disclosure of the transaction in published periodic filings (annual reports) required? (0-2) | Disclosure on the transaction and on the conflict of interest | 2.0 |
| Is immediate disclosure of the transaction to the public and/or shareholders required? (0-2) | No disclosure obligation | 0.0 |
| Must an external body review the terms of the transaction before it takes place? (0-1) | No | 0.0 |
| Extent of director liability index (0-10) | 6.0 | |
| Can shareholders sue directly or derivatively for the damage caused by the Buyer-Seller transaction to the company? (0-1) | Yes | 1.0 |
| Can shareholders hold the interested director liable for the damage caused by the transaction to the company? (0-2) | Liable if negligent | 1.0 |
| Can shareholders hold members of the approving body liable for the damage cause by the transaction to the company? (0-2) | Liable if negligent | 1.0 |
| Must the interested director pay damages for the harm caused to the company upon a successful claim by a shareholder plaintiff? (0-1) | Yes | 1.0 |
| Must the interested director repay profits made from the transaction upon a successful claim by a shareholder plaintiff? (0-1) | Yes | 1.0 |
| Is the interested director fined and imprisoned or disqualified upon a successful claim by the shareholder plaintiff? (0-1) | No | 0.0 |
| Can a court void the transaction upon a successful claim by a shareholder plaintiff? (0-2) | Voidable if negligently concluded | 1.0 |
| Ease of shareholder suits index (0-10) | 8.0 | |
| Before filing suit, can shareholders owning 10% of the company’s share capital inspect the transaction documents? (0-1) | Yes | 1.0 |
| Can the plaintiff obtain any documents from the defendant and witnesses during trial? (0-3) | Any relevant document | 3.0 |
| Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) | Yes | 1.0 |
| Can the plaintiff directly question the defendant and witnesses during trial? (0-2) | Yes | 2.0 |
| Is the level of proof required for civil suits lower than that of criminal cases? (0-1) | No | 0.0 |
| Can shareholder plaintiffs recover their legal expenses from the company? (0-2) | Yes if successful | 1.0 |
| Extent of shareholder governance index (0-10) | 5.7 | |
| Extent of shareholder rights index (0-10) | 9.0 | |
| Does the sale of 51% of Buyer’s assets require shareholder approval? | Yes | 1.0 |
| Can shareholders representing 10% of Buyer’s share capital call for an extraordinary meeting of shareholders? | Yes | 1.0 |
| Must Buyer obtain its shareholders’ approval every time it issues new shares? | Yes | 1.0 |
| Do shareholders automatically receive preemption rights every time Buyer issues new shares? | Yes | 1.0 |
| Must shareholders approve the election and dismissal of the external auditor? | Yes | 1.0 |
| Must changes to the voting rights of a class of shares be approved only by the holders of the affected shares? | No | 0.0 |
| Assuming that Buyer is a limited company, does the sale of 51% of Buyer’s assets requires shareholder approval? | Yes | 1.0 |
| Assuming that Buyer is a limited company, can shareholders representing 10% of Buyer’s share capital call for an extraordinary meeting of shareholders? | Yes | 1.0 |
| Assuming that Buyer is a limited company, must Buyer obtain its shareholders’ approval every time it issues new shares? | Yes | 1.0 |
| Assuming that Buyer is a limited company, do shareholders automatically receive preemption rights every time Buyer issues new shares? | Yes | 1.0 |
| Extent of ownership and control index (0-10) | 2.0 | |
| Is the CEO prohibited from also being chair of the board of directors? | No | 0.0 |
| Must the board of directors include independent and nonexecutive board members? | No | 0.0 |
| Can shareholders remove members of Buyer’s board of directors without cause before the end of their term? | Yes | 1.0 |
| Must Buyer’s board of directors include a separate audit committee? | No | 0.0 |
| Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? | No | 0.0 |
| Must Buyer pay dividends within a maximum period set by law after the declaration date? | No | 0.0 |
| Is a subsidiary prohibited from acquiring shares issued by its parent company? | No | 0.0 |
| Assuming that Buyer is a limited company, can shareholders remove members of Buyer’s board of directors without cause before the end of their term? | Yes | 1.0 |
| Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? | No | 0.0 |
| Assuming that Buyer is a limited company, must Buyer pay dividends within a maximum period set by law after the declaration date? | No | 0.0 |
| Extent of corporate transparency index (0-10) | 6.0 | |
| Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? | Yes | 1.0 |
| Must Buyer disclose information about board members’ other directorships as well as basic information on their primary employment? | No | 0.0 |
| Must Buyer disclose the compensation of individual managers? | No | 0.0 |
| Must a detailed notice of general meeting be sent 30 days before the meeting? | No | 0.0 |
| Can shareholders representing 5% of Buyer’s share capital put items on the agenda for the general meeting? | Yes | 1.0 |
| Must Buyer's annual financial statements be audited by an external auditor? | Yes | 1.0 |
| Must Buyer disclose its audit reports to the public? | Yes | 1.0 |
| Assuming that Buyer is a limited company, must a detailed notice of general meeting be sent 30 days before the meeting? | No | 0.0 |
| Assuming that Buyer is a limited company, can shareholders representing 5% of Buyer’s share capital put items on the agenda for the general meeting? | Yes | 1.0 |
| Assuming that Buyer is a limited company, must Buyer's annual financial statements be audited by an external auditor? | Yes | 1.0 |