GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
3. Directors and Officers 3.1 Board Structure Management Board
codetermination prior to and after principle) – eg, if no codetermination exists and needed to exist prior to the incorporation of the SE, then no codetermina - tion would need to be agreed upon in the employee participation agreement for the SE. 3.2 Board Members The applicable law does not predefine roles for mem - bers of the managing bodies. One member of the management board can be and usually is nominated as the chair or spokesperson. Apart from this, it is common for the tasks and duties of the management board and managing directors to be divided between them in several departments, either functional or oper - ational divisions. Thereby, names like CEO, CFO and COO are generally attached to the members on their business cards, the website and in the email footer; however, these are neither statutorily foreseen nor do they trigger any special further rights or obligations. With respect to the supervisory board of an AG, and a two-tier system SE or an administrative board of a single-tier system SE, each member generally has the same rights and duties, and must be familiar with the relevant business sector of the company. However, according to applicable law, boards of listed compa - nies must have two members with certain skills, one with accounting expertise and the other with auditing expertise. 3.3 Board Composition Management Board/Managing Directors Beyond the requirements set out in 3.1 Board Struc- ture and 3.2 Board Members , there are no other stat- utory rules governing the composition of the manage - ment board of an AG or a two-tier system SE, nor the managing directors of a single-tier system SE or GmbH. However, if such a company is listed on a stock exchange as well as parity codetermined and consists of more than three members as of 1 August 2022, at least one new member must be female and one must be male. With respect to the management board of an AG and to a two-tier system SE or an administrative board of a single-tier system SE that are listed on a stock exchange or codetermined, the supervisory board must determine a target percentage for women on
There is no legally predefined structure for the man - agement board of an AG or two-tier system SE, nor for the managing directors of a single-tier system SE or GmbH. The management board can consist of one or more natural persons, unless the articles of associa - tion require a minimum number of members; the same applies to the number of managing directors. Supervisory Board The supervisory board of an AG, KGaA and a two-tier system SE, and the administrative board of a single- tier system SE, has to consist of at least three mem - bers, or a higher number up to nine, 15 or 21 mem - bers, depending on the registered share capital of the corporation, to be set in the articles of association. If an AG, KGaA or GmbH exceeds the threshold of, generally, 500 German employees, one third of the supervisory board members of the company must be employee representatives – ie, the one-third partici - pation ( Drittelbeteiligungsgesetz , or DrittelbG). In this case, the number of supervisory board members must be divisible by three. If an AG, KGaA or GmbH and its controlled companies exceed, generally, 2,000 Ger - man employees in total, the supervisory board must consist of 50% employee representatives – ie, the parity codetermination ( Mitbestimmungsgesetz , or MitbestG). In this case, the supervisory board must consist of at least 12 members, with the exact number increasing depending on the total number of German employees. German codetermination rules do not apply to the SE. Instead, when incorporating an SE, an agreement on the participation of employees in the SE (the so-called employee participation agreement) has to be nego - tiated with the special negotiating body established particularly for such negotiation, representing employ - ees from the German company, its subsidiaries and branches that are in EU and EEA member states other than Germany. The rules on codetermination are part of the agreement, with the general principle that the level of codetermination of the German company used to incorporate the SE shall be maintained (freezing of
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