ETHIOPIA Law and Practice Contributed by: Sisay Habte, Tibebe Zewdu, Michael Mengistu and Helina Bezabih, TBeST Law LLP
• make certain that sufficient procedures for risk management and internal control are established; • provide to the supervisory board, if any, all information needed for the performance of the duties of the supervisory board in a timely manner; and • prevent damage to the company, or where prevention is not possible, mitigate adverse impact of acts which are prejudicial to the company. Without prejudice to what is stated above, the directors shall be responsible for: • keeping regular records of the meetings of the board of directors and shareholders, accounts and books, registers of sharehold - ers and directors and other necessary docu - ments; • ensuring submission of accounts and books to auditors when required; • submitting an annual report of the company’s operations including a financial statement to the general meetings of shareholders; • convening meetings as provided in Commer - cial Code or memorandum of association; • convening an extraordinary general meeting without delay where three-quarters of the capital of the company is lost; • setting up the reserve funds required by law or memorandum of association or resolution of general meeting of shareholders; and • where the company’s ability to meet its financial obligations diminishes or where it suspends payment of debt applying, as appropriate, for preventive restructuring, reor - ganisation or bankruptcy. Supervisory board – the supervisory board of a share company may have the following pow - ers and duties in addition to those that may be
assigned to it by the memorandum of associa - tion of the company: • causing the submission of documents and information necessary to discharge its responsibility, and examine the same; • calling and leading a general meeting of shareholders, where the board of directors is unable or unwilling to convene such a meet - ing; • taking part and giving opinion in the meeting of the board of directors without voting. • where it comes to know or has reason to sus - pect that an act that causes damage to the company has been committed, investigating the matter or cause it to be investigated or, take the necessary measures with the view to instituting legal action, if need be; • undertaking supervision to ensure that direc - tors and other members of the management are discharging their responsibilities properly; • where it has been ascertained that they have committed an act that jeopardises the inter - ests of the company, demanding that correc - tive measures be taken; • recommending the removal of those who have failed to discharge their responsibili - ties properly, as appropriate, to the board of directors or general meeting of shareholders; • supervising as well as causing the auditing of the financial affairs of the company; • submitting reports to the general meeting; and • carrying out other functions as may be assigned to it by the memorandum of asso - ciation or resolution of the general meeting of shareholders. General Manager The general manager is responsible for the day- to-day management of the company.
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