FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
4.3 Board Composition Requirements/ Recommendations Various regulations and recommendations apply to the selection of directors and the composition of the board. • Number of directors – the board of directors shall be composed of at least three and at most 18 directors, including the chairman. Within these limits, the number of directors is determined by the by-laws. • Natural or legal person – directors may be natural or legal persons, except for the chair - man who must be a natural person. • Share ownership – it is not mandatory for directors to hold shares of the company, but the by-laws may provide otherwise. • Diversity – boards of directors of compa - nies having more than 250 employees shall comprise a proportion of directors represent - ing each gender at the board of at least 40%, or, if the board is composed of eight or less directors, the difference between the repre - sentatives of each gender shall not exceed two. • Age limit – in accordance with the French Commercial Code, not more than a third of the directors may be aged over 70, but the by-laws may provide for a stricter age limit. • Multiple directorships – directors may not hold more than five directorships in public limited companies, it being understood that directorships in affiliated companies are excluded for the calculation of the director - ships. • Representation of employees – in large companies, employees are entitled to appoint directors representing the employees to the board of directors. • Representation of employee shareholders – in large companies where more than 3% of the share capital is held by employees, the share -
holders shall appoint directors representing the employee shareholders. • Independence – corporate governance codes recommend that, in listed compa - nies, a sizable proportion of directors should be independent (please refer to 4.5 Rules/ Requirements Concerning Independence of Directors ). 4.4 Appointment and Removal of Directors/Officers SA Directors are appointed and may be dismissed at any time, without cause (ad nutum) by the general meeting of shareholders. Given that the agenda of the general meeting is set by the board of directors, shareholders are allowed to vote on the appointment and dismissal of one or more directors even if these decisions were not registered in the agenda. When a seat at the board of directors becomes vacant, the board is entitled to provisionally appoint a new director to fill the vacancy, subject to ratification by the next general meeting. The chairman of the board, whether they assume the CEO position or not, is appointed by and among the directors of the board and must be a natural person. The chairman may be dismissed at any time, without cause by the board of direc - tors. If the chairman is dismissed from their role as director by the shareholders, the chairman is automatically dismissed from the chairman and, as the case may be, CEO position. If the chairman does not assume the CEO’s position, the CEO is appointed by the board of directors. Deputy CEOs may also be appointed by the board of directors upon proposal from the CEO. The CEO and deputy CEOs must be natural persons. The CEO and deputy CEOs may be dismissed at any time by the board of
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