GEORGIA Law and Practice Contributed by: Tamar Jikia and Archil Giorgadze, Andersen in Georgia
• electing and dismissing members of the man - agement body and supervisory board; • making decisions on the distribution of profits and dividends; • approving amendments to the charter or instrument of incorporation; • deciding on the reorganisation or winding-up of the company; and • authorising significant transactions and changes in capital. Management Body/Board of Directors The management body/board of directors is responsible for the day-to-day operations and management of the company. It can consist of one or more managers who are appointed by the general meeting. Its functions are as follows: • managing the company’s business activities and operations; • representing the company in relations with third parties; • making decisions on issues that do not fall within the authority of the general meeting or supervisory board; • ensuring compliance with legal and regulatory requirements; and • preparing and submitting financial statements and business reports. Supervisory Board The supervisory board oversees the activities of the management body and ensures that the company adheres to good governance practic - es. Generally it is not mandatory for a company to have a supervisory board; it is mandatory only for public-interest entities and companies with publicly traded shares. Its functions are as follows:
• controlling and supervising the activities of the management body; • reviewing and approving the annual accounts and business reports; • representing the company in legal disputes against managers; and • convening the general meeting when neces - sary. The management structure may be one- or two- tier. • One-tier structure – In this model, the com - pany’s management is undertaken by manag - ers or directors forming a single management body. This structure blends the management and oversight functions, with these individu - als directly overseeing the company’s opera - tions. • Two-tier structure – Distinguished by a divi - sion of roles, the management tasks in a two-tier structure are carried out by one or more managers. Simultaneously, the super - visory board is responsible for overseeing the company’s strategic direction, ensuring alignment with laws and the company char - ter. Unlike managers, the supervisory board does not engage in day-to-day management but oversees the managers’ activities without issuing binding directives. Managers in both structures are endowed with the authority to make decisions concerning dai - ly operations. They, along with the supervisory board members in a two-tier system, are bound by fiduciary duties to prioritise the company’s best interests. 3.2 Decisions Made by Particular Bodies The general meeting of shareholders typically decides issues material to the operation and
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