Supervisory board of a joint-stock company

In a joint‑stock company, a supervisory board operates as a permanent oversight board. Its role is to supervise the company’s activities on an ongoing basis. The supervision covers all areas of the company’s operations. The board reviews management reports and the financial statements. It analyses proposals concerning profit distribution or loss coverage. Each year it prepares a written report for the general meeting.

Scope of duties of the supervisory board

The supervisory board evaluates whether the reports are consistent with documents and the actual state of affairs. It examines the company’s situation, including the effectiveness of internal control and risk‑management systems. It reviews how the management board fulfils its information duties. It assesses the quality of documents and explanations provided to the board. It also reports on the costs of audits commissioned by the board to advisers or auditors.

Supervisory powers of the board

The supervisory board may examine all company documents. It may inspect the company’s assets. It has the right to request information from the management board, commercial proxies and employees. It may also request documents concerning subsidiaries and related companies. Information must be provided without delay, no later than within two weeks. The management board may not restrict access to requested data.

Cooperation with the statutory auditor

If the financial statements are subject to statutory audit, the supervisory board notifies the auditor of the meeting. The company ensures the auditor’s participation. The auditor presents the audit findings and answers the board’s questions.

Adviser to the supervisory board

The board may instruct an adviser to examine a specific matter related to the company’s operations. The adviser may prepare analyses and opinions. The management board must provide access to documents. The adviser must maintain confidentiality. The board may share the adviser’s findings with shareholders if doing so does not harm the company. The articles may limit the board’s ability to engage advisers.

Additional powers of the supervisory board

The board may suspend management board members for important reasons. It may delegate its members to temporarily perform management duties. If a management board member cannot perform their duties, the board must promptly take steps to fill the vacancy.

Consent of the board for certain actions

The articles may expand the board’s powers. They may require the board’s consent for specific actions of the management board. If the board refuses consent, the management board may refer the matter to the general meeting. The board must approve transactions with related companies if their value exceeds ten percent of the company’s assets.

Composition of the supervisory board

The supervisory board consists of at least three members. In public companies, the minimum is five. Members are appointed and dismissed by the general meeting. Shareholders holding one‑fifth of the share capital may demand that the board be elected by separate group voting. In such a case, the mandates of the existing members expire.

Term of office of board members

The term of office of a board member may not exceed five years. The rules governing the term of office of management board members apply accordingly.

Prohibition on combining functions

A management board member, commercial proxy, liquidator, branch manager, chief accountant, legal adviser or attorney employed by the company may not serve on the supervisory board. The prohibition also applies to persons reporting directly to the management board and to members of governing bodies of subsidiaries.

Duty of loyalty

A supervisory board member must act with professional diligence. They must remain loyal to the company. They may not disclose the company’s secrets, even after their mandate ends.

Rules for adopting resolutions

The board adopts resolutions if at least half of its members are present. Meetings may be held remotely. Members may vote in writing through another board member. Resolutions may be adopted in writing or remotely if all members have been informed of the draft resolution.

Convening meetings

The board’s work is directed by the chairperson. They convene meetings and organise the board’s work. Meetings are convened by invitations specifying the date, place and agenda. The board may adopt resolutions on matters not included in the agenda if no member objects. Meetings must be held at least once per quarter.

Delegation of board members

The board may delegate its members to perform individual supervisory tasks. It may also establish board committees. Delegated members may attend management board meetings with an advisory vote. They must report the results of their supervisory activities to the board.

Remuneration of the supervisory board

Board members may receive remuneration. It is determined by the articles or by a resolution of the general meeting. Remuneration in the form of profit participation may be granted only by the general meeting. Board members are entitled to reimbursement of costs related to their duties.

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