ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
the delegation provisions set out in the charter or board policies. Executive Body (Director or Management Board) The executive body (director or management board) is responsible for the company’s day- to-day operations and for implementing strate - gic decisions adopted by the shareholders or BoD. The scope of the executive body’s author - ity is defined in the company’s charter and in the employment contract of the CEO or general director. Within this framework, the CEO or gen - eral director may act independently on behalf of the company, provided they stay within the limits of their authority. Where a collegial management board is established, decisions may be made collectively in line with internal regulations. The executive body is accountable to the BoD (if one exists) or directly to the shareholders. It has to report on the company’s performance and major actions taken. Executives authorised under the charter or by resolution may enter into binding agreements and represent the company in legal and business matters. The structure and functioning of a BoD in Arme - nia is governed by the LJSC and the LLLC, among other regulations. The structure of a BoD varies depending on the type and size of the company. A BoD is a supervisory body responsible for overseeing management and board members are elected by shareholders at the general meet - ing. 4. Directors and Officers 4.1 Board Structure
In JSCs, the establishment of a BoD is manda - tory if the number of shareholders exceeds 50. BoD members may or may not be company employees. However, executive management (eg, the CEO) cannot simultaneously be the board chair. 4.2 Roles of Board Members As in most corporate governance systems, a BoD consists of various members with distinct roles and responsibilities. The following is an overview of the key positions and their functions. Chairperson of the Board The chairperson of the board leads the board and ensures effective governance. They set the board meeting agenda and preside over meet - ings. They also act as a liaison between the board and executive management and represent the company in high-level matters. Additionally, they ensure the board follows corporate govern - ance principles. Board Members (Directors) Board members (directors) participate in stra - tegic decision-making and oversee the com - pany’s financial and operational performance. They ensure compliance with laws and ethical standards and may be executive (involved in daily management) or non-executive (independ - ent oversight). Independent Directors Independent directors are not affiliated with the company’s management or major shareholders and so can provide objective and unbiased opin - ions. They enhance transparency and protect minority shareholders’ rights. Additionally, they often serve on audit or risk committees.
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