GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
German codetermination rules do not apply to the SE. Instead, when incorporating an SE, an agreement on the participation of employees in the SE (the so-called employee participa - tion agreement) has to be negotiated with the special negotiating body, which is established particularly for such negotiation, representing employees from the German company, its sub - sidiaries and branches that are in EU and EEA member states other than Germany. The rules on codetermination are part of the agreement, with the general principle that the level of code - termination of the German company used to incorporate the SE shall be maintained (freezing of codetermination prior to and after principle) – eg, if no codetermination exists and needed to exist prior to the incorporation of the SE, then no codetermination would need to be agreed upon in the employee participation agreement for the SE, etc. 4.2 Roles of Board Members The applicable law does not predefine roles for members of the managing bodies. One member of the management board can be and usually is nominated as chairman or spokesperson. Apart from this, it is common for the tasks and duties of the management board and managing directors to be divided between them in several depart - ments, either functional or operational divisions. Thereby, names like CEO, CFO and COO are generally attached to the members on their busi - ness cards, the website, and in the email footer; however, these are neither statutorily foreseen nor do they trigger any special further rights or obligations. With respect to the supervisory board of an AG, and a two-tier system SE or an administrative board of a single-tier system SE, only the fol - lowing rules have to be considered. Generally, each member has the same rights and duties,
and must be familiar with the relevant business sector of the company. However, according to applicable law, boards of listed companies must have two members with certain skills, one with accounting expertise and the other with auditing expertise. 4.3 Board Composition Requirements/ Recommendations Management Board/Managing Directors Beyond the requirements set out in 4.1 Board Structure and 4.2 Roles of Board Members , there are no other statutory rules governing the composition of the management board of an AG or a two-tier system SE, nor of the managing directors of a single-tier system SE or GmbH. However, if such a company is listed on a stock exchange as well as parity codetermined and consists of more than three members as of 1 August 2022, at least one new member must be female and one must be male. With respect to the management board of an AG, and a two-tier system SE or an administrative board of a single-tier system SE, that is listed on a stock exchange or codetermined, the supervi - sory board must determine a target percentage for women on the management board and the management boards for second/third line man - agement, as well as deadlines for when such percentages are to be reached. In the case of a set target of zero, the management board must justify this in a clear and comprehensive manner. If at the time of the determination the percentage of women on the management board is below 30%, the target percentage may not be lower than the present percentage. These corporations must include a declaration on corporate governance in their management reports. The DCGK recommends taking diversity into account when composing the management.
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