Publication date: 31.05.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
The supervisory board of the joint-stock company is one of the key management bodies in the company. The main functions of the supervisory board are to control the activities of the executive body (usually the board or directorate) and protect the interests of shareholders.
The main tasks and functions of the supervisory board:
1. Control over the executive body: The supervisory board must control the activities of the company's executive body, in particular, the establishment of strategy, financial condition, risk management and execution of business plans.
2. Planning and strategic management: The supervisory board can participate in the development of the company's strategy and the determination of key areas of development.
3. Management of risk management: It is responsible for the assessment and management of risks that affect the company's activities.
4. Communication with shareholders: The Supervisory Board ensures open and transparent communication with shareholders and representatives of other interested parties.
Membership in the supervisory board:
Cumulative voting is one of the methods of electing members of the supervisory board (or other management bodies) of a public joint-stock company. During cumulative voting, shareholders have the opportunity not only to vote for a candidate, but also to accumulate their votes and use them to support one or more candidates. In private JSCs, cumulative voting can function, and another approach can be chosen. Usually, the minimum number of members of the supervisory board of a public joint-stock company is established in accordance with the requirements of the law, the founding documents of the company or corporate governance standards. According to the current legislation, the number of members of the supervisory board must be at least 5 people. The chairman of the supervisory board of a joint-stock company is usually elected by the members of the supervisory board itself. The procedure for electing the chairman may be determined by the founding documents of the company. The chairman of the supervisory board is usually responsible for directing the work of the board, ensuring its effective functioning and exercising control over the company's activities in accordance with his authority.
Meeting of the supervisory board:
1. Frequency of meetings: The frequency of meetings of the supervisory board of a public joint-stock company is usually determined by the founding documents of the company, the charter, and may also be regulated by the legislation of the country where the company is located. According to the specified rules, meetings of the supervisory board must be held at least once per quarter, but may be held more often if necessary.
2. Quorum at meetings: A meeting of the supervisory board of a public joint-stock company can be valid if more than half of its members participate in it, which is called a quorum. A quorum is the minimum number of council members required to make a valid decision. Quorum rules are usually established by the company's founding documents or bylaws of the supervisory board. Usually this is more than half of the total number of members of the supervisory board. If less than half of the members are present at the meeting, it may not be valid and may not be able to make a decision. The quorum requirement is intended to ensure the representativeness and legitimacy of the decisions made. The majority of members of the supervisory board must be present at the meeting so that they can represent the interests of the company and shareholders in making important decisions.
3. Making decisions: Any decisions of the supervisory board are made by the majority of members participating in the meeting, unless a larger number is defined by the statute.
Committees of the supervisory board:
The supervisory board of a joint-stock company can form permanent or temporary committees from among its members to solve specific tasks or issues. This is a standard practice in corporate governance, which allows you to draw on the specialized knowledge and experience of board members to effectively resolve specific issues.
So, the main differences between permanent and ad hoc committees are as follows:
1. Standing Committees: These committees are created for the ongoing work of the supervisory board and may have permanent duties, for example, audit committee, personnel committee, risk audit committee, etc. They usually deal with certain aspects of the company's operations on an ongoing basis.
2. Ad Hoc Committees: These committees are formed to address specific tasks or problems for a specific period of time. After completing the task or achieving the goal, they can be disbanded. Temporary committees can be created, for example, to consider a specific project, situation or problem.
If there is a need to resolve issues that require a specialized approach or additional research, the supervisory board may form an appropriate committee to conduct a detailed analysis and develop recommendations.
Legal services for business in the creation of management bodies:
A business lawyer will help prepare all the necessary documentation, prepare a charter, conduct a legal analysis of the situation. Equally important is the preparatory stage, namely bringing the legal entity into compliance with the legislative requirements, electing members of the supervisory board - a lawyer for business will help with this. Therefore, legal protection of business is a guarantee of effectiveness in the process of creating management bodies.
