A supervisory board
or supervisory committee
is a group of individuals chosen by the stockholders
of a company
to promote their interests through the governance of the company and to hire and supervise the executive directors and CEO
varies between countries, especially regarding the board system
. There are countries that have a one-tier
board system (like the U.S.) and there are others that have a two-tier
board system (like Germany).
In a one-tier board all directors (both executive directors
as well as non-executive directors
) form one board.
In a two-tier board there is the management board
(all executive directors) and there is a separate supervisory board (all non-executive directors).
German corporation law Aktiengesetz
requires all Aktiengesellschaften
to have two boards:a management board called Vorstand
and a supervisory board called Aufsichtsrat.
In Germany the supervisory board of large corporations is composed of 20 members, 10 of which are elected by the shareholders, the other 10 being employee representatives. The supervisory board oversees and appoints the members of the management board and must approve major business decisions.
The minimum of members a board can consist of is three, the maximum 21. The number of members has to be divisible by three, as stated in the law.
When it comes to internal elections the head of supervisory board Aufsichtratvorsitzender
has two votes in case of a draw.
The supervisory board, in theory, is... Read More