FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
body is provided by law. However, the shareholders may decide, in an SAS, to create specific corporate bodies and entrust them with supervisory powers. Management Functions Management functions include the definition and implementation of the company’s strategy and the representation of the company towards third parties. Depending on the corporate form of the company, management functions are exercised by individuals or collegiate bodies. SAs may be structured pursuant to a one-tier board or a two-tier board system, at the shareholders’ discre - tion. This choice must be registered in the by-laws. In an SA with a one-tier board system, the manage - ment functions are split between the board of direc - tors (whose members are appointed by the sharehold - ers), the chair of the board of directors (appointed by the board from among the directors) and the CEO ( directeur général , also appointed by the board of directors). The board of directors may also decide to name a single person to act as chair and CEO ( prési- dent - directeur général ). The board of directors, upon request of the CEO, may appoint one or more deputy CEOs to assist the CEO and delegate management powers to them. In an SA with a two-tier board system, the manage - ment functions are entrusted to the executive board ( directoire ), appointed by the supervisory board. Mem - bers of the executive board are not allowed to be part of the supervisory board. While the executive board traditionally operates as a collegial body, French law now allows greater flexibility for smaller companies: pursuant to Article L.225-58 of the French Commercial Code, as specified by a decree of 13 August 2025, the functions of the executive board may be exercised by a single individual in companies whose share capital is below EUR250,000. In an SAS, the law entrusts the chair ( président ) with all management functions. The chair may be a natural or a legal person. The shareholders are free to provide additional corporate bodies in the by-laws, entrusted with limited management functions.
SARLs are managed by one or more managing direc - tors ( gérants ), who are natural persons. 2.2 Types of Decisions The powers and types of decisions made by the cor - porate bodies differ depending on the corporate form of the company. SA In one-tier board systems, the board of directors is competent to determine the strategic orientations of the company’s business and ensure their implementa - tion within the limits of the company’s interest, taking social and environmental issues into consideration (please refer to 7.1 ESG Requirements ). In particular, the board of directors: • appoints the chair and the CEO, and defines their compensation schemes; • examines and approves the annual financial state - ments; • drafts management reports for the shareholders; • convenes the general meeting of shareholders and sets forth its agenda; and • approves related-party agreements. The powers of the board of directors shall be exer - cised within the limits of the corporate scope of the company and the power granted by law to the general meeting of shareholders. The CEO and the deputy CEOs, if any, are in charge of the day-to-day management of the company, within the limits of the corporate object of the company and the powers of the board of directors and the gen - eral meeting. Vis-à-vis third parties, the CEO has the broadest powers to represent the company and act on its behalf, even those exceeding the corporate scope and the limitations of powers that may result from the by-laws. However, those limits may only be enforced towards third parties if it is proven that they had knowledge of such limitations. The board secretary role is not defined by law or governance codes, but has become essential in ensuring the effective implementation of governance standards, particularly in listed companies. The sec - retary supports the proper functioning of the board
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