Management in a simple joint-stock company

In a simple joint‑stock company, management is exercised by the management board or the board of directors. The articles of association may also require the establishment of a supervisory board. Members of corporate board are bound by limitations arising from the articles and shareholders’ resolutions. Each member must act with due care and loyalty toward the company. In the event of a conflict of interest, the member must disclose it and refrain from participating in the matter. A member may not engage in competing activities without the company’s consent. A mandate expires upon approval of the financial statements for the first full financial year after appointment, unless the articles provide otherwise. A mandate also expires upon death, resignation or dismissal.

Work of the board

In multi‑member boards proper organization of work is essential. A board may adopt internal rules defining how it operates. A committee may be appointed to prepare resolutions. Resolutions are adopted after proper notification of members about the meeting or vote. Resolutions are adopted by a majority of votes unless the articles provide otherwise. Minutes are prepared from each meeting and include the content of resolutions and voting results. Members of boards may request that a meeting of the supervisory board or the board of directors be convened. In agreements with an audit firm, the company is represented by an attorney appointed by shareholders or by the supervisory board.

Management board

The management board manages the company’s affairs and represents the company. It may consist of one or more members. Members of the board are appointed and dismissed by shareholders unless the articles provide otherwise. In companies with a supervisory board, the supervisory board appoints the management board. A board member may be dismissed at any time. In a multi‑member board all members manage the company jointly unless the articles state otherwise. Appointment of a commercial proxy requires the consent of all board members. The right of representation covers all acts of the company and cannot be limited with effect toward third parties. In agreements with a board member, the company is represented by an attorney or the supervisory board.

Supervisory board

The supervisory board consists of at least three members. It exercises ongoing supervision over the company’s activities. It cannot issue binding instructions to the management board. Its duties include reviewing financial statements, assessing proposals of the management board and preparing annual reports. The board may request documents, information and explanations concerning the company and its subsidiaries. It may appoint an advisor to examine specific matters. Members of the management board, commercial proxies and persons responsible for finance cannot serve on the supervisory board.

Board of directors

The board of directors manages the company’s affairs, represents it and supervises its operations. It may be single‑member or multi‑member. Directors are appointed by shareholders. A director may be dismissed at any time. In a multi‑member board directors manage the company jointly. Their responsibilities include strategic decisions, business planning and shaping the organizational structure. Executive and non‑executive directors may be appointed. Non‑executive directors exercise ongoing supervision and prepare annual reports. They may request documents and information concerning the company and related entities.

Representation of the company

A director has the right to represent the company in all matters. In a multi‑member board, statements on behalf of the company are made by two directors or one director together with a commercial proxy unless the articles provide otherwise. In agreements with a director, the company is represented by an attorney appointed by shareholders.

General meeting

Shareholders adopt resolutions at the general meeting or outside the meeting, in writing or electronically. Electronic voting is possible if provided in the articles or if all shareholders consent. Resolutions require approval of financial statements, granting discharge to corporate boards, decisions on disposal of the enterprise or real estate and the issuance of bonds. The ordinary general meeting is held within six months after the end of the financial year. Shareholders have the right to request documents related to financial statements and the company’s operations.

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