In order to be able to usefully assess whether the joint stock company is the appropriate business model for the medium and long term plan and purpose of the business, it is important for investors to be informed about the basic issues of the executive management of the company.
The joint stock company is managed by one or more directors, the number of directors is always odd. When there are several directors, they form a board of directors and elect a chairman from among them (if the joint-stock company reaches a certain size that requires by law the auditing of financial statements, then the appointment of three directors is mandatory). The chairman of the board of directors can also be appointed by the general meeting and can be dismissed at any time by the body that elected/appointed him. The Board of Directors meets at least once every 3 months.
During their mandate, directors may not enter into an employment contract with the company. If the directors have been appointed from among the company’s employees, the individual employment contract shall be suspended for the duration of the term of office.
In a joint-stock company, management duties may be delegated to a director/directors, in which case he/she will also appoint the general manager.
The Board of Directors has the following basic powers, which cannot be delegated to directors:
(a) to determine the main lines of business and development of the company;
- b) to establish accounting policies and the financial control system, and to approve financial planning;
- c) appointing and dismissing directors and determining their remuneration;
- d) supervising the work of the directors;
- e) preparing the annual report, organizing the general meeting of shareholders and implementing its resolutions;
- f) filing a petition for the opening of insolvency proceedings.
- g) the duties received by the board of directors from the general meeting of shareholders
(1) The board of directors may delegate the management of the company to one or more directors, appointing one of them as general manager.
Directors may be appointed from among the directors or from outside the board of directors.
The directors shall be responsible for taking all measures relating to the management of the company within the limits of the company’s objects and subject to the exclusive powers reserved by law or by the articles of association to the board of directors and the general meeting of shareholders. The manner of organizing the work of the directors may be laid down in the Articles of association or by decision of the board of directors. The directors shall keep the board of directors regularly and comprehensively informed of the operations undertaken and those envisaged.
Directors within the meaning of the law shall be only those persons who have been appointed as such by the board of directors and to whom the board of directors has delegated management powers. Directors will be registered by the Board of Directors in the commercial register, stating whether they act jointly or separately.
Directors shall be jointly and severally liable with their immediate predecessors if, being aware of irregularities committed by them, they fail to report them to the auditors or, where appropriate, to the internal auditors and the financial controller.
Dualist system
The articles of association may stipulate that the public limited company is managed by a management board and a supervisory board. This system of management of the joint-stock company is called “Dualist system”.
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