Supervisory board

the supervisory board forms DUA reading tables the system with the executive committee. The supervisory board is one of three organs of a corporation. The two other organs are the executive committee and the general meeting.

Legal basis of the work of the supervisory board forms the law on limited companies as well as the statute of the respective corporation. Besides practically all supervisory boards have own agendas. Many supervisory boards have committees for special topics, most frequently are here Prüfungsausschuss and personnel committee.

The supervisory board has the personnel authority for the executive committee: Itorders the members of the board on at the most 5 years; a repeated order is permissible, § 84 exp. 1 S. 1, 2 AktG. The supervisory board can recall the order for important reason, § 84 exp. 3 S. 1 AktG.

Task of the supervisory board is it, which management - thus the executive committee - to supervise (§ 111 AktG). For this the supervisory board management measures can make 111 exp. dependent on its agreement, §. 4 S. 2 AktG. Besides it has obligations to check (in particular company conclusion and end-of-year procedure of the society,§ 111 exp. 2 S. 3 AktG) as well as report obligations. The supervisory board represents the society opposite the executive committee. He appoints executive committees and recalls these. Co-operation between executive committees and supervisory boards is usually regulated in agendas.

The supervisory board of a quoted societymust at least two meetings in the calendar half-year hold; in not-quoted societies the supervisory board can decide that a meeting is to be held in the calendar half-year (§ 110 exp. 3 AktG).

The supervisory board consists of representatives of the shareholders and - as German special case - inmost enterprises additionally from representatives of the employees (§ 96 AktG). Active executive committees may the supervisory board - contrary to the anglo-saxon board OF Directors or in Switzerland - do not belong (§ 105 AktG).

The supervisory boards, the representatives of the shareholdersare, by the general meeting are selected. In enterprises with usually more than 2000 employees a supervisory board is formed after the law of codetermination. The representatives of the employees are selected from the coworkers of the society, separately according to representatives of the employees (inGermany gives it since the BetrVG reform 2001 no more distinction of employees and workers) and to the leading employee. If a supervisory board must be replaced during the yearly and if no extraordinary general meeting is therefore called up, a supervisory board on request can the executive committee, a supervisory board member or a shareholder to be also judicially ordered.

In the limited partnership on shares the supervisory board orders neither over the personnel authority in accordance with § 84 AktG, nor it can make management measures dependent on its agreement (§ 111 exp. 4S. 2 AktG). The KGaA is subject likewise to legal participation, because of the reduced powers of the supervisory board speaks one in addition, of participation-legal granting privilege of the KGaA.

A person may do member of the supervisory board only at at the most 10 societies with legalprescribed supervisory board its (§ 100 exp. 2 AktG); i.e. Societies, which must form neither after law on limited companies nor after law of codetermination a supervisory board, are not considered, even if they formed voluntarily a supervisory board. Each post as a supervisory board chairman is counted doubly thereby(§ 100 exp. 2 sentence 3 AktG). However maximally 5 supervision advice posts are not taken in account at associated companies.

The German Corporate Governance Kodex makes different demands against the personality profile of a supervisory board, in particular against its technical abilities and its loyalty in relation to the enterprise.

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