FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
The chair of the board has a distinct role: it is in charge of organising and directing the work of the board of directors and reporting to the general meeting. The chair ensures the proper functioning of the company’s bodies and that the directors are able to fulfil their duties. 3.3 Board Composition Various regulations and recommendations apply to the selection of directors and the composition of the board. • Number of directors – the board of directors shall be composed of at least three and at most 18 directors, including the chair. Within these limits, the number of directors is determined by the by- laws. • Natural or legal person – directors may be natural or legal persons, except for the chair, who must be a natural person. • Share ownership – it is not mandatory for directors to hold shares of the company, but the by-laws may provide otherwise. • Diversity – boards of directors of companies having more than 250 employees shall comprise at least 40% for each gender. This requirement is assessed by taking account of directors representing employees and employees-shareholders, where applicable. If the board is composed of eight or fewer directors, the difference between the repre - sentatives of each gender shall not exceed two. • Age limit – in accordance with the French Com - mercial Code, not more than a third of the directors may be aged over 70, but the by-laws may provide for a stricter age limit. • Multiple directorships – directors may not hold more than five directorships in public limited com - panies, it being understood that directorships in affiliated companies are excluded for the calcula - tion of the directorships. • Representation of employees – in large companies, employees are entitled to appoint directors repre - senting the employees to the board of directors. • Representation of employee shareholders – in large companies where more than 3% of the share capital is held by employees, the shareholders shall appoint directors representing the employee shareholders.
• Independence – corporate governance codes rec - ommend that, in listed companies, a sizable pro - portion of directors should be independent (please refer to 3.5 Independence of Directors ). 3.4 Appointment and Removal of Directors/ Officers SA Directors are appointed and may be dismissed at any time, without cause (ad nutum), by the general meeting of shareholders. Given that the agenda of the general meeting is set by the board of directors, shareholders are allowed to vote on the appointment and dismissal of one or more directors even if these decisions were not registered in the agenda. When a seat at the board of directors becomes vacant, the board is entitled to provisionally appoint a new direc - tor to fill the vacancy, subject to ratification by the next general meeting. The chair of the board is appointed by and from among the directors of the board and must be a natu - ral person, whether they assume the CEO position or not. The chair may be dismissed at any time, without cause by the board of directors. If the chair does not assume the CEO position, the CEO is appointed by the board of directors. Deputy CEOs may also be appointed by the board of directors upon proposal from the CEO. The CEO and deputy CEOs must be natural persons, and may be dismissed at any time by the board of directors, but may claim damages if dismissed without cause ( juste motif ). The appointment of directors must also comply with the legal requirements outlined in 3.3 Board Compo- sition . SAS The chair is appointed and dismissed in accordance with the by-laws or internal rules of the company. If the by-laws do not provide any details regarding the conditions of dismissal, the chair may be dismissed at any time, without cause. SARL The managing directors of a SARL are appointed and dismissed by the general meeting of shareholders at
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