FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
• appoints the chairman and the CEO and defines their compensation schemes; • examines and approves the annual financial statements; • drafts management reports for the sharehold - ers; • convenes the general meeting of sharehold - ers and sets forth its agenda; and • approves related-party agreements. The powers of the board of directors shall be exercised within the limits of the corporate scope of the company and the power granted by law to the general meeting of shareholders. The CEO, and the deputy CEOs, if any, are in charge of the day-to-day management of the company, within the limits of the corporate object of the company and the board of direc - tors’ and the general meeting’s powers. Vis-à-vis third parties, the CEO has the broadest powers to represent the company and act on its behalf, even those exceeding the corporate scope and the limitations of powers that may result from the by-laws. However, those limits may only be enforced towards third parties if it is proven that they had knowledge of such limitations. In two-tier board systems, the supervisory board is responsible for the supervision of the man - agement and the preservation of the company’s long-term interest. Therefore, the supervisory board: • appoints the members of the manage - ment board and defines their compensation schemes; • controls the annual financial statements; • reviews the management reports; and • approves related-party agreements.
Unlike the board of directors, the supervisory board is not entitled to make management deci - sions. The executive board is in charge of the strategy of the company and its day-to-day manage - ment, within the limits of the general meeting’s powers. The chairman of the executive board has broadest powers to represent the company towards third parties. SAS The chairman of the SAS is the only manda - tory management body of the company, and is therefore entrusted with the broadest powers to manage the company within the limits of the shareholders’ powers and represent it towards third parties. The shareholders may set other corporate bod - ies to assist or supervise the chairman. Inter - nally, the chairman’s powers shall be limited by specific powers granted to these corporate bodies. The shareholders may also decide to limit the chairman’s powers in the by-laws and require prior authorisation from the sharehold - ers for material decisions. Those limits may, however, be enforced towards third parties only if it is proven that they had knowledge of such limitations. SARL In the SARL, each of the managing directors has the broadest powers to manage the company within the limits of the corporate scope and shareholders’ powers. The same rules regard - ing third parties apply to the managing directors. The role and powers of the shareholders are described in 5.2 Role of Shareholders in Com- pany Management .
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