FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
tered in minutes – drafted by an external secretary or by a member of the corporate body – executed by the chair of the meeting and usually at least one other member of the body. Recent reforms introduced by the Attractivité Act and its implementing decree have further modernised cor - porate governance practices by facilitating remote decision-making. Subject to authorisation in the by- laws, shareholder meetings (excluding those of listed companies and the annual ordinary shareholder meet - ing convened to approve the financial statements in a SARL) and board meetings may now be held entirely via telecommunication. In any case, shareholders of SAs and SCAs may attend physically held meetings by such means. By-laws may also allow written con - sultation (which may be conducted electronically), and postal voting for shareholders and board decisions (provided no board member objects). French law does not dictate any decision-making pro - cess for non-collegiate corporate bodies, although it is recommended that material management decisions are registered in writing. In addition, the by-laws or other internal rules may enforce voluntary decision- making processes. As mentioned in 2.1 Principal Bodies and Functions , SAs may be structured pursuant to a one-tier board or a two-tier board system. Given the relative scarcity of the two-tier board system, this section ( 3. Directors and Officers ) will only deal with the one-tier board SA. SA boards of directors are composed of three to 18 directors, including the chair of the board. The share - holders appoint the directors, who may be natural or legal persons. In the latter case, they must appoint a permanent representative to the board. For further details regarding board composition, please refer to 3.3 Board Composition . The board of directors may set up specialised com - mittees (audit committee, compensation committee, 3. Directors and Officers 3.1 Board Structure SA
ESG committee, etc), whose role is to issue opinions on matters submitted by the board in order to improve the effectiveness of the board. Specialised commit - tees have consultative powers only and are not a sub - stitute for the board. Audit committees are mandatory for companies whose shares are admitted to trading on a regulated market. The shareholders may also appoint observers ( cen- seurs ) to the board of directors, with an advisory role In an SAS, the structure of the board – if the share - holders decided to voluntarily set up such collegiate body – is freely set in the by-laws or internal rules adopted by the shareholders, if any. SARL There is no board of directors in a SARL, as the man - agement is exclusively performed by its manager(s). 3.2 Board Members The board of directors is a collegiate body. As a prin - ciple, the directors collectively exercise the functions assigned to the board and do not have any individual powers, except for the chair of the board. However, the board of directors may grant specific assignments to individual directors, in order to improve the cor - porate governance of the company and facilitate the board’s mission. only. SAS Directors may be assigned to one or more specialised committees to help assess specific matters, given their skills and experience (please refer to 3.1 Board Structure ). The board of directors may appoint a lead director chosen from among the independent directors, to play a mediating role between the board of directors and the shareholders and improve shareholder dialogue. This function may, however, be entrusted to the chair of the board, particularly where the roles of chair and CEO are separated, or to a lead director with relevant experience in institutional communication. Lead direc - tors are strongly recommended by the AFEP-MEDEF Code in a controlled listed company.
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