GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
management board, which is an important part of supervising the management board. Besides the supervision of the management board, the supervisory board is responsible for: • the appointment and dismissal of the mem - bers of the management board; • their service contracts; and • the review and determination of the financial statements. Administrative Board In a single-tier system SE, the administrative board is responsible for fundamental manage - ment issues, such as long-term business goals, the organisational structure, and the strategy and general guidelines of the SE, as well as the budgeting; whereas the managing directors are “only” responsible for the day-to-day manage - ment. The administrative board has the author - ity to issue internally binding instructions to the managing directors. General Meeting Only selected decisions are reserved by law for the general meeting of an AG and an SE. With respect to the annual ordinary general meet - ing, such decisions include the appropriation of profits, the appointment of the auditor, the formal approval of action for members of both the management board and supervisory board, and the vote on the annual remuneration report; Fundamental, extraordinary decisions include: • the election and removal of the supervisory board members; • amendments to the articles of association; and • resolutions on restructuring measures and the sale of substantially all of the corporation’s
assets, as well as on corporate agreements (profit and loss pooling agreements). Managing Directors Managing directors of a GmbH can principally make day-to-day management decisions with - out consulting the shareholders. However, as the shareholders’ meeting is the supreme body, a broader catalogue of decisions is reserved by law for the shareholders’ meeting of a GmbH than for a general meeting of an AG: all deci - sions that the ordinary general meeting of an AG has to take plus the review and determination of the financial statements and all fundamental, extraordinary decisions of the general meeting of an AG, as well as the right to instruct the manag - ing directors. 3.3 Decision-Making Processes Management Board The management board of an AG and a two- tier system SE generally decides in physical or virtual meetings, if a certain quorum of – most of the time – more than half the members of the management board are present or represented, by way of resolution, generally to be passed by a simple majority. However, qualifying majority requirements can be set – eg, in the rules of pro - cedure for the management board. In practice, it is recognised and common that members of the management board are allocated certain indi - vidual responsibilities as part of their department ( Ressort ). Decisions within each department are made by the responsible, single member of the manage - ment board, unless such decision is of material nature, in which case a resolution of the manage - ment board is necessary. This also applies where another member of the management board so requests. Finally, the management board may
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