GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
General Meeting Only selected decisions are reserved by law for the general meeting of an AG and an SE. With respect to the annual ordinary general meeting, such decisions include the appropriation of profits, the appointment of the auditor, the formal approval of action for mem - bers of both the management board and the supervi - sory board, and the vote on the annual remuneration report. Fundamental, extraordinary decisions include: • the election and removal of the supervisory board members; • amendments to the articles of association; and • resolutions on restructuring measures and the sale of substantially all of the corporation’s assets, and on corporate agreements (profit and loss pooling agreements). Managing Directors Managing directors of a GmbH can principally make day-to-day management decisions without consult - ing the shareholders. However, as the shareholders’ meeting is the supreme body, a broader catalogue of decisions is reserved by law for the shareholders’ meeting of a GmbH than for a general meeting of an AG: all decisions that the ordinary general meeting of an AG has to take plus the review and determina - tion of the financial statements, and all fundamental, extraordinary decisions of the general meeting of an AG, as well as the right to instruct the managing direc - tors. 2.3 Decision-Making Processes Management Board The management board of an AG and a two-tier sys - tem SE generally decides in physical or virtual meet - ings, if a certain quorum of – most of the time – more than half the members of the management board are present or represented, by way of resolution, generally to be passed by a simple majority. However, qualify - ing majority requirements can be set – eg, in the rules of procedure for the management board. In practice, it is recognised and common that members of the management board are allocated certain individual responsibilities as part of their department ( Ressort ). Decisions within each department are made by the responsible, single member of the management
board, unless such decision is of a material nature, in which case a resolution of the management board is necessary. This also applies where another member of the management board so requests. Finally, the management board may form committees for specific tasks, although this is not that common in practice. The same decision-making process applies (more or less) to managing directors of a single-tier system SE and a GmbH. Supervisory Board The supervisory board of an AG, a two-tier system SE and a KGaA decide by way of resolution, generally with a simple majority. However, the articles of asso - ciation or the rules of procedure for the supervisory board may foresee qualifying majority requirements. Supervisory board meetings shall be held as physical meetings from the statutory starting point. Virtual meetings as well as hybrid forms are permis - sible. Supervisory board members not present in a meeting may not be represented by third persons or other supervisory board members, but can only give a written voting declaration ( Stimmbotschaft ). The meeting has a quorum if the majority of members are present – at least three. The supervisory board is entitled to form commit - tees from within itself – eg, an audit committee and a nomination committee. The DCGK expressly requires the formation of these two committees for listed companies. Committees are generally responsible for preparing supervisory board topics and consum - mating resolutions passed by the supervisory board. Sometimes, committees are also entitled to resolve instead of the supervisory board. However, this is not allowed in statutorily foreseen topics – eg, decisions concerning the remuneration and service contracts of members of the management board. Rules apply - ing to the supervisory board in a two-tier system also have to be adhered to by the administrative board in a single-tier system SE.
254 CHAMBERS.COM
Powered by FlippingBook