Public Companies Without a Controlling Shareholder

After more than three years of discussions in the Knesset committee, a comprehensive update to the Israeli Companies Law, focused on companies without a controlling shareholder, has been approved by the Knesset’s Constitution, Law, and Justice Committee. This update addresses the unique challenges faced by such public companies and aims to promote relevant and competitive corporate governance, including permitting staggered board structures and reducing the frequency of general assemblies (GAs) to streamline governance. Ultimately, it is intended to empower Israeli companies to thrive locally and support a strong pipeline of growth companies within Israel.

Alongside the legislative update, the Committee has also approved accompanying regulations easing certain corporate governance requirements for companies whose shares are traded outside Israel. These regulations, in whose formulation we took part during the parliamentary discussions, are designed to reflect the needs of Israeli growth companies listed abroad. They align Israeli rules with common international practices, extend relief to the board’s nominations committee, and allow venture capital funds to hold up to 35% of a company’s shares in the years following an IPO without being presumed to control the company, while maintaining a balanced approach to corporate governance.

Both the legislative amendments and the accompanying regulations are currently pending final approval by the plenary of the Knesset.