!Корпоративное право 2023-2024 / 2013-study-analysis_en
.pdfDiscussion
Map 1.4.c: Board-level employee participation in Europe
Legend31 |
Country |
|
|
No mandatory board-level |
BE, BG, CY, EE, EL, ES, FR, IE, IT, LT, MT, |
employee participation |
PL, PT, RO, UK, LV |
|
|
Mandatory board-level employee |
|
participation |
AT, CZ, DE, DK, FI, LU, HR, HU, SE, SI, SK |
|
|
|
|
Nomination/opposition rights only |
NL |
|
|
31 Henceforth, we use the official two-letter country code to identify the Member States (and Croatia). These codes are as
follows: |
|
|
|
|
Belgium |
(BE) |
Lithuania |
(LT) |
|
Bulgaria |
(BG) |
Hungary |
(HU) |
|
Czech Republic |
(CZ) |
Malta |
(MT) |
|
Denmark |
(DK) |
Netherlands |
(NL) |
|
Germany |
(DE) |
Austria |
(AT) |
|
Estonia |
(EE) |
Poland |
(PL) |
|
Ireland |
(IE) |
Portugal |
(PT) |
|
Greece |
(EL) |
Romania |
(RO) |
|
Spain |
(ES) |
Slovenia |
(SI) |
|
France |
(FR) |
Slovakia |
(SK) |
|
Italy |
(IT) |
Finland |
(FI) |
|
Cyprus |
(CY) |
Sweden |
(SE) |
|
Latvia |
(LV) |
United Kingdom |
(UK) |
|
Luxembourg |
(LU) |
Croatia |
(HR) |
|
|
|
|
|
|
|
|
|
11 |
Directors’ Duties and Liability in the EU |
Our classification above is based on mandatory rules applicable to public companies with large domestic business operations. We do not report here special rules applicable only to companies operating in special industry sectors and/or to companies that are, or formerly were, (part-)owned by the state or another public body.
Employee participation can play an important role in the practical effect rules on directors’ duties and liability have in practice. Twelve of the 28 countries examined by us grant employees some form of influence over the composition of the board. These countries are Austria, Croatia, the Czech Republic, Germany, Denmark, Finland, Hungary, Luxembourg, the Netherland, Slovenia, Sweden, and Slovakia. Of these countries, only Sweden has been classified as providing for a one-tier board,32 while all other countries either mandate, or at least allow the adoption of a two-tiered board structure. There exists a fair amount of variance among the systems of employee participation; the spectrum ranges from the German system, where employee representatives33 populate 50% of the supervisory board in large34 companies, to the Dutch system of nomination and opposition rights, where employees are in effect restricted to make recommendations for the appointment of particular candidates, but shareholders can in turn oppose such nominations.35 In addition, the employee representatives must not themselves be employees of the company.36
We find that, throughout the examined countries, employee representatives on the board of directors are subject to essentially the same duties as other board members, although the practical application of such duties may somewhat differ across Member States.
The decision to mandate board-level employee participation also relates to the focus and scope of directors’ duties more generally. We find that the participation of employee representatives in the managerial decision-making process strongly correlates with a less shareholder-centric understanding of the “interest of the company”. This is of significance for the main subject of this Report, since the interests of the company, and the question whether or not board members acted in the company’s interest plays a pivotal role in determining the accountability of board members across all jurisdictions examined by us.
1.5 Appointment and dismissal of directors
Summary of the country reports in tabulated form
Table 2.3.a: Shareholder appointment and removal rights
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
Shareholders may |
|
appoint members |
|
of supervisory |
Austria |
board |
|
Management |
|
board members |
|
are appointed by |
|
|
Shareholders may remove members of supervisory board, but need supermajority to do so without cause (subject to articles, which can provide for
Two-tier board structure mandatory
32But see the qualification as regards this classification above (text to n 27).
33In Germany, some of the employee representatives are nominated by the relevant trade union, rather than the employees of the company; see s.7 of the German Co-Determination Law (“Mitbestimmungsgesetz”); see in more detail the German Report in Annex I.
34i.e. companies with more than 2,000 employees. See s.7 of the German Co-Determination Law and, in more detail, the German Report in Annex I.
35See e.g. G Jackson, “Employee Representation in the Board Compared: A Fuzzy Sets Analysis of Corporate Governance,
Unionism and Political Institutions” (2005) 12 (3) Industrielle Beziehungen 1, as well as the Dutch Report in Annex I.
36See the Dutch Report in Annex I for more detail.
37The data presented here only refers to without cause removal rights, i.e. the right to remove a director without proving a breach of duties on the part of the director.
12 Directors’ Duties and Liability in the EU
|
|
Rights of |
Rights of shareholders |
|
|
|
|
Country |
shareholders to |
Comments |
|
||
|
to remove directors37 |
|
||||
|
|
appoint directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
supervisory board |
simple majority). |
|
|
|
|
|
|
Management board |
|
|
|
|
|
|
members can only be |
|
|
|
|
|
|
removed by supervisory |
|
|
|
|
|
|
board and only for good |
|
|
|
|
|
|
cause. A vote of no |
|
|
|
|
|
|
confidence by the |
|
|
|
|
|
|
shareholders may |
|
|
|
|
|
|
constitute a good cause |
|
|
|
|
|
|
unless passed for |
|
|
|
|
|
|
unjustified reasons. |
|
|
|
|
|
|
|
|
|
|
|
|
All directors are |
All directors may be |
|
|
|
|
|
removed by the general |
One-tier structure; simple |
|
||
|
|
appointed by the |
|
|||
|
Belgium |
meeting of shareholders |
majority suffices for removal |
|
||
|
general meeting of |
|
||||
|
|
without cause at any |
of directors |
|
||
|
|
shareholders |
|
|||
|
|
time |
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
|
|
|
|
|
Shareholders may |
|
|
||
|
|
Shareholders |
|
|
||
|
|
remove members of the |
|
|
||
|
|
appoint all |
|
|
||
|
|
board of directors at any |
|
|
||
|
|
members of the |
|
|
||
|
|
time without cause |
|
|
||
|
|
board of directors |
|
|
||
|
|
Two-tier system: |
|
|
||
|
|
Two-tier system: |
|
|
||
|
|
Shareholders may |
- Choice of board structures |
|
||
|
|
Shareholders |
|
|||
|
Bulgaria |
remove members of the |
- simple majority suffices for |
|
||
|
appoint members |
|
||||
|
|
supervisory board |
removal of directors |
|
||
|
|
of the supervisory |
|
|||
|
|
without cause |
|
|
||
|
|
board; supervisory |
|
|
||
|
|
management board |
|
|
||
|
|
board appoints |
|
|
||
|
|
members may be |
|
|
||
|
|
members of the |
|
|
||
|
|
removed by the |
|
|
||
|
|
management |
|
|
||
|
|
supervisory board |
|
|
||
|
|
board |
|
|
||
|
|
without cause |
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
|
|
|
|
|
Shareholders may |
|
|
||
|
|
Shareholders |
|
|
||
|
|
remove members of the |
|
|
||
|
|
appoint all |
|
|
||
|
|
board of directors at any |
|
|
||
|
|
members of the |
- Choice of board structures |
|
||
|
|
time without cause |
|
|||
|
|
board of directors |
|
|
||
|
|
Two-tier system: |
- in the more common two- |
|
||
|
|
|
|
|||
|
|
Two-tier system: |
tier system, the management |
|
||
|
|
Shareholders may |
|
|||
|
|
Shareholders |
board enjoys a higher degree |
|
||
|
Croatia |
remove members of the |
|
|||
|
appoint members |
of “insulation” as its members |
|
|||
|
|
supervisory board |
|
|||
|
|
of the supervisory |
cannot be removed without |
|
||
|
|
without cause |
|
|||
|
|
board; supervisory |
cause (even by the |
|
||
|
|
management board |
|
|||
|
|
board appoints |
supervisory board) |
|
||
|
|
members may be |
|
|||
|
|
members of the |
|
|
||
|
|
removed by the |
|
|
||
|
|
management |
|
|
||
|
|
supervisory board only |
|
|
||
|
|
board |
|
|
||
|
|
for good cause |
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory removal right of |
|
|
|
All directors are |
Mandatory removal right |
shareholders (simple |
|
|
|
|
appointed by |
majority) |
|
||
|
Cyprus |
in relation to all board |
|
|||
|
general meeting of |
Shareholders may vest |
|
|||
|
|
members |
|
|||
|
|
|
|
|||
|
|
shareholders |
power to appoint directors in |
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
board, but removal rights still |
|
|
|
|
|
|
|
|
|
|
|
13 |
Directors’ Duties and Liability in the EU |
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
|
|
apply mandatorily |
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
|
|
|
Shareholders may |
|
||
|
Shareholders |
|
||
|
remove members of the |
|
||
|
appoint all |
|
||
|
board of directors at any |
|
||
|
members of the |
|
||
|
time without cause |
|
||
|
board of directors |
Removal rights can be |
||
|
Two-tier system: |
|||
|
Two-tier system: |
exercised by simple majority |
||
|
Shareholders may |
|||
Czech |
Shareholders |
of the votes (where |
||
remove members of the |
||||
Republic |
appoint members |
available), but articles may |
||
supervisory board |
||||
|
of the supervisory |
provide for higher threshold |
||
|
without cause |
|||
|
board; supervisory |
or additional requirements |
||
|
Shareholders’ removal |
|||
|
board appoints |
|
||
|
rights in relation to |
|
||
|
members of the |
|
||
|
management board |
|
||
|
management |
|
||
|
members is subject to |
|
||
|
board |
|
||
|
provision in articles |
|
||
|
|
|
||
|
|
|
|
|
|
“Nordic Model”: |
“Nordic Model”: |
|
|
|
Shareholders may |
|
||
|
Shareholders |
|
||
|
remove members of the |
|
||
|
appoint all |
|
||
|
board of directors at any |
|
||
|
members of the |
|
||
|
time without cause |
|
||
|
board of directors |
|
||
|
Executives can be |
- Nordic Model still by far the |
||
|
Executives are |
|||
|
removed by board of |
prevalent choice |
||
|
appointed by |
|||
|
directors without cause |
- Although the two-tier |
||
|
board of directors |
|||
|
|
|||
|
Two-tier system: |
structure was modelled on |
||
Denmark |
Two-tier system: |
|||
Shareholders may |
German law, the supervisory |
|||
|
||||
|
Shareholders |
|||
|
remove members of the |
board members can remove |
||
|
appoint members |
|||
|
supervisory board |
the management board |
||
|
of the supervisory |
|||
|
without cause |
members at their discretion |
||
|
board; supervisory |
|||
|
Only supervisory board |
|
||
|
board appoints |
|
||
|
members can remove |
|
||
|
members of the |
|
||
|
management (executive) |
|
||
|
management |
|
||
|
board members; |
|
||
|
(executive) board |
|
||
|
removal without cause |
|
||
|
|
|
||
|
|
|
|
|
|
Shareholders |
Shareholders may |
|
|
|
remove members of |
|
||
|
appoint members |
|
||
|
supervisory board |
|
||
|
of supervisory |
|
||
|
without cause |
|
||
|
board |
Two-tier board structure |
||
Estonia |
Management board |
|||
Management |
mandatory |
|||
|
members can only be |
|||
|
board members |
|
||
|
removed by supervisory |
|
||
|
are appointed by |
|
||
|
board and only for good |
|
||
|
supervisory board |
|
||
|
cause. |
|
||
|
|
|
||
|
|
|
|
|
|
“Nordic Model”: |
“Nordic Model”: |
|
|
|
Shareholders |
Shareholders may |
|
|
|
appoint all |
remove members of the |
- Nordic Model is the |
|
Finland |
members of the |
board of directors at any |
prevalent choice; few |
|
board of directors |
time without cause |
companies with supervisory |
||
|
||||
|
Executives are |
Executives can be |
boards |
|
|
appointed by |
removed by board of |
|
|
|
board of directors |
directors without cause |
|
|
|
|
|
|
14 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
Two-tier system: |
Two-tier system: |
|
|
|
Shareholders |
Shareholders may |
|
|
|
appoint members |
remove members of the |
|
|
|
of the supervisory |
supervisory board |
|
|
|
board; supervisory |
without cause |
|
|
|
board appoints |
Only supervisory board |
|
|
|
|
|
||
|
members of the |
members can remove |
|
|
|
|
|
||
|
management |
management (executive) |
|
|
|
|
|
||
|
(executive) board |
board members; |
|
|
|
|
|
||
|
|
removal without cause |
|
|
|
|
|
|
|
|
|
One-tier system with |
|
|
|
|
PDG:38 |
|
|
|
|
Shareholders may |
|
|
|
One-tier system: |
remove all members of |
|
|
|
Shareholders |
the board of directors |
|
|
|
appoint all |
without cause |
|
|
|
members of the |
One-tier system without |
|
|
|
board of directors |
PDG: |
|
|
|
Two-tier system: |
Shareholders may |
|
|
France |
Shareholders |
remove all members of |
One-tier model by far the |
|
appoint members |
|
most popular choice |
||
|
the board of directors |
|||
|
of the supervisory |
without cause, but need |
|
|
|
board; supervisory |
good cause to remove |
|
|
|
board appoints |
the general |
|
|
|
members of the |
manager/CEO |
|
|
|
management |
Two-tier system: |
|
|
|
board |
|
||
|
Only supervisory board |
|
||
|
|
|
||
|
|
may remove members |
|
|
|
|
of the management |
|
|
|
|
board |
|
|
|
|
|
|
|
|
|
Shareholders may |
|
|
|
|
remove members of |
|
|
|
|
supervisory board, but |
|
|
|
|
need supermajority to do |
|
|
|
|
so without cause |
|
|
|
Shareholders may |
(subject to articles, |
|
|
|
appoint members |
which can provide for |
|
|
|
of supervisory |
simple majority). |
|
|
Germany |
board |
Management board |
Two-tier board structure |
|
Management |
members can only be |
mandatory |
||
|
||||
|
board members |
removed by supervisory |
|
|
|
are appointed by |
board and only for good |
|
|
|
supervisory board |
cause. A vote of no |
|
|
|
|
confidence by the |
|
|
|
|
shareholders may |
|
|
|
|
constitute a good cause |
|
|
|
|
unless passed for |
|
|
|
|
unjustified reasons. |
|
|
|
|
|
|
|
Greece |
Shareholders |
Shareholders may |
one-tier board structure is |
|
appoint all |
remove any member of |
mandatory in Greece |
||
|
38 The PDG or “président-directeur general” model combines the offices of the CEO and the chairman of the board.
15 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
members of the |
the board of directors at |
|
|
|
board of directors |
any time without cause |
|
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
|
|
|
Shareholders may |
|
||
|
Shareholders |
|
||
|
remove members of the |
|
||
|
appoint all |
|
||
|
board of directors at any |
|
||
|
members of the |
|
||
|
time without cause |
|
||
|
board of directors |
|
||
|
Two-tier system: |
|
||
|
Two-tier system: |
|
||
|
Shareholders may |
|
||
|
Shareholders |
|
||
Hungary |
remove members of the |
|
||
appoint members |
|
|||
|
supervisory board |
|
||
|
of the supervisory |
|
||
|
without cause |
|
||
|
board; supervisory |
|
||
|
Management board |
|
||
|
board appoints |
|
||
|
members may be |
|
||
|
members of the |
|
||
|
removed by supervisory |
|
||
|
management |
|
||
|
board only (subject to |
|
||
|
board |
|
||
|
articles) |
|
||
|
|
|
||
|
|
|
|
|
|
|
|
Mandatory removal right of |
|
|
|
Any director may be |
shareholders (simple |
|
|
All directors |
removed without cause |
majority) |
|
Ireland |
elected by |
by shareholder meeting |
Shareholders may vest |
|
|
shareholders |
with simple majority of |
power to appoint directors in |
|
|
|
votes cast |
board, but removal rights still |
|
|
|
|
apply mandatorily |
|
|
|
|
|
|
|
|
Traditional system: |
|
|
|
Traditional system: |
Shareholders may |
|
|
|
remove members of the |
|
||
|
Shareholders |
|
||
|
board of directors at any |
|
||
|
appoint all |
|
||
|
time without cause |
|
||
|
members of the |
|
||
|
Members of the board of |
|
||
|
board of directors |
|
||
|
statutory auditors can |
|
||
|
and the board of |
|
||
|
only be removed with |
|
||
|
statutory auditors |
|
||
|
cause and following |
|
||
|
One-tier system: |
|
||
|
court approval |
Traditional system still by far |
||
|
Shareholders |
|||
|
One-tier system: |
the most popular choice |
||
|
appoint all |
|||
|
Shareholders may |
External auditors may only be |
||
Italy |
members of the |
|||
remove any member of |
removed without cause |
|||
|
board of directors |
|||
|
the board of directors at |
irrespective of the board |
||
|
Two-tier system: |
|||
|
any time without cause |
structure |
||
|
Shareholders |
|||
|
Two-tier system: |
|
||
|
appoint members |
|
||
|
Shareholders may |
|
||
|
of the supervisory |
|
||
|
remove members of the |
|
||
|
board; supervisory |
|
||
|
supervisory board |
|
||
|
board appoints |
|
||
|
without cause |
|
||
|
members of the |
|
||
|
Only supervisory board |
|
||
|
management |
|
||
|
may remove members |
|
||
|
board |
|
||
|
of the management |
|
||
|
|
|
||
|
|
board without cause |
|
|
|
|
|
|
|
|
Shareholders |
Shareholders may |
|
|
Latvia |
appoint members |
remove members of the |
Mandatory two-tier structure |
|
|
of the supervisory |
supervisory board |
|
16 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
board; supervisory |
without cause |
|
|
|
board appoints |
Only supervisory board |
|
|
|
|
|
||
|
members of the |
may remove members |
|
|
|
|
|
||
|
management |
of the management |
|
|
|
|
|
||
|
board |
board, and only with |
|
|
|
|
|
||
|
|
cause |
|
|
|
|
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|
|
Where supervisory |
|
|
|
Where supervisory |
board is established: |
|
|
|
General meeting may |
|
||
|
board is |
|
||
|
remove supervisory |
|
||
|
established: |
|
||
|
board members without |
|
||
|
General meeting |
|
||
|
cause |
|
||
|
appoints |
|
||
|
supervisory board may |
|
||
|
supervisory board |
|
||
|
remove members of the |
|
||
|
supervisory board |
|
||
|
board of directors and |
Both, board of directors and |
||
|
appoints board of |
|||
Lithuania |
the company manager |
supervisory board are |
||
directors |
||||
|
without cause |
optional in Lithuania |
||
|
Where no |
|||
|
Where no supervisory |
|
||
|
supervisory board |
|
||
|
board is established: |
|
||
|
is established: |
|
||
|
General meeting may |
|
||
|
General meeting |
|
||
|
remove supervisory |
|
||
|
appoints members |
|
||
|
board members and |
|
||
|
of the board of |
|
||
|
company manager |
|
||
|
directors |
|
||
|
without cause |
|
||
|
|
|
||
|
|
|
|
|
|
|
One-tier system: |
|
|
|
|
Shareholders may |
|
|
|
|
remove members of the |
|
|
|
One-tier system: |
board of directors at any |
|
|
|
|
|
||
|
Shareholders |
time without cause |
|
|
|
|
|
||
|
appoint all |
Two-tier system: |
- Removal rights are |
|
|
members of the |
Shareholders may only |
exercised with simple |
|
|
board of directors |
remove members of the |
majority, unless otherwise |
|
|
Two-tier system: |
supervisory board |
stated in the articles of |
|
|
|
|
||
Luxembourg |
Shareholders |
without cause |
association |
|
|
|
|||
appoint members |
management board |
- Articles of association can |
||
|
||||
|
of the supervisory |
members may be |
be changed by shareholders |
|
|
board; supervisory |
removed by the |
to gain right to remove |
|
|
board appoints |
supervisory board |
management board members |
|
|
members of the |
without cause |
without cause |
|
|
management |
Where the articles |
|
|
|
|
|
||
|
board |
provide so, management |
|
|
|
|
|
||
|
|
board members may |
|
|
|
|
also be removed by the |
|
|
|
|
general meeting |
|
|
|
|
|
|
|
|
Shareholders |
Shareholders may |
One-tier structure |
|
|
appoint all |
remove any member of |
||
Malta |
Simple majority suffices for |
|||
members of the |
the board of directors |
|||
|
removal of directors |
|||
|
board of directors |
without cause |
||
|
|
|||
|
|
|
|
|
Netherlands |
One-tier system: |
One-tier system: |
Employees have the right to |
|
Shareholders |
Shareholders may |
nominate, and under certain |
||
|
17 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
appoint all |
remove members of the |
circumstances oppose, the |
|
|
members of the |
board of directors at any |
appointment of supervisory |
|
|
board of directors |
time without cause |
board members |
|
|
Two-tier system: |
Two-tier system: |
|
|
|
Shareholders |
Shareholders may |
|
|
|
appoint members |
remove members of the |
|
|
|
of the supervisory |
supervisory board |
|
|
|
board; supervisory |
without cause |
|
|
|
board appoints |
supervisory board may |
|
|
|
|
|
||
|
members of the |
remove management |
|
|
|
|
|
||
|
management |
board members without |
|
|
|
|
|
||
|
board |
cause, but an obligation |
|
|
|
|
|
||
|
|
to consult the general |
|
|
|
|
meeting applies |
|
|
|
|
|
|
|
|
Shareholders may |
Shareholders may |
|
|
|
remove members of |
|
||
|
appoint members |
|
||
|
supervisory board |
|
||
|
of supervisory |
|
||
|
without cause |
|
||
|
board |
Two-tier board structure |
||
Poland |
Management board |
|||
Management |
mandatory |
|||
|
members can only be |
|||
|
board members |
|
||
|
removed by supervisory |
|
||
|
are appointed by |
|
||
|
board and only for good |
|
||
|
supervisory board |
|
||
|
cause. |
|
||
|
|
|
||
|
|
|
|
|
|
“Latin board |
|
|
|
|
structure”: |
|
|
|
|
Shareholders |
|
|
|
|
appoint members |
|
|
|
|
of the board of |
|
|
|
|
directors and the |
|
|
|
|
audit board |
|
|
|
|
One-tier board |
|
|
|
|
structure: |
|
|
|
|
Shareholders |
Shareholders may |
|
|
|
appoint members |
remove board members |
The removal rights are |
|
Portugal |
of the board of |
at any time without |
subject to the limitations in |
|
|
directors |
cause |
the articles of association |
|
|
Two-tier board |
|
|
|
|
structure: |
|
|
|
|
Shareholders |
|
|
|
|
appoint members |
|
|
|
|
of the supervisory |
|
|
|
|
board |
|
|
|
|
Supervisory board |
|
|
|
|
appoints |
|
|
|
|
management |
|
|
|
|
board members |
|
|
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
- Removal rights are |
|
Romania |
Shareholders |
Shareholders may |
exercised with simple |
|
appoint all |
remove members of the |
majority, unless otherwise |
||
|
||||
|
members of the |
board of directors at any |
stated in the articles of |
18 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
board of directors |
time without cause |
association |
|
|
Two-tier system: |
Two-tier system: |
- Articles of association can |
|
|
Shareholders |
Shareholders may |
be changed by shareholders |
|
|
appoint members |
remove members of the |
to gain right to remove |
|
|
of the supervisory |
supervisory board |
management board members |
|
|
board; supervisory |
without cause |
without cause |
|
|
board appoints |
Management board |
|
|
|
|
|
||
|
members of the |
members may be |
|
|
|
|
|
||
|
management |
removed by the |
|
|
|
|
|
||
|
board |
supervisory board |
|
|
|
|
|
||
|
|
without cause |
|
|
|
|
Where the articles |
|
|
|
|
provide so, management |
|
|
|
|
board members may |
|
|
|
|
also be removed by the |
|
|
|
|
general meeting |
|
|
|
|
|
|
|
|
One-tier system: |
One-tier system: |
|
|
|
Shareholders |
Shareholders may |
|
|
|
appoint all |
remove members of the |
|
|
|
members of the |
board of directors at any |
|
|
|
board of directors |
time without cause |
Co-optation right (i.e. board |
|
|
Two-tier system: |
Two-tier system: |
||
|
appointing additional |
|||
|
Shareholders |
Shareholders may |
||
|
directors) can be provided for |
|||
|
appoint members |
remove members of the |
||
Slovakia |
by articles, but appointment |
|||
of the supervisory |
supervisory board |
|||
|
only valid until following |
|||
|
board; supervisory |
without cause |
||
|
general meeting and subject |
|||
|
board appoints |
Management board |
||
|
to limitations |
|||
|
members of the |
members may be |
||
|
|
|||
|
management |
removed by the |
|
|
|
board (subject to |
supervisory board |
|
|
|
articles of |
without cause (subject to |
|
|
|
association) |
articles of association) |
|
|
|
|
|
|
|
|
|
Shareholders may |
|
|
|
|
remove members of |
|
|
|
|
supervisory board, but |
|
|
|
|
need supermajority to do |
|
|
|
|
so without cause |
|
|
|
Shareholders may |
(subject to articles, |
|
|
|
appoint members |
which can provide for |
|
|
|
of supervisory |
simple majority). |
|
|
Slovenia |
board |
Management board |
Two-tier board structure |
|
Management |
members can only be |
mandatory |
||
|
||||
|
board members |
removed by supervisory |
|
|
|
are appointed by |
board and only for good |
|
|
|
supervisory board |
cause. A vote of no |
|
|
|
|
confidence by the |
|
|
|
|
shareholders may |
|
|
|
|
constitute a good cause |
|
|
|
|
unless passed for |
|
|
|
|
unjustified reasons. |
|
|
|
|
|
|
|
Spain |
All directors |
Any director may be |
In case a director breaches |
|
elected by |
removed without cause |
his or her duties, any |
||
|
||||
|
|
|
|
19 Directors’ Duties and Liability in the EU
|
Rights of |
Rights of shareholders |
|
|
Country |
shareholders to |
Comments |
||
to remove directors37 |
||||
|
appoint directors |
|
|
|
|
|
|
|
|
|
shareholders |
by shareholder meeting |
shareholder can demand |
|
|
|
with simple majority of |
immediate removal of such |
|
|
|
votes cast |
director |
|
|
|
|
|
|
|
All directors |
|
|
|
|
elected by |
|
Nordic Model |
|
|
shareholders, but |
Any directors can be |
||
|
The chief executive officer is |
|||
Sweden |
managing director |
removed at any time |
||
typically not a member of the |
||||
|
is not typically |
without cause |
||
|
board of directors |
|||
|
member of the |
|
||
|
|
|
||
|
board |
|
|
|
|
|
|
|
|
|
|
|
Mandatory removal right of |
|
|
|
Any director may be |
shareholders (simple |
|
United |
All directors |
removed without cause |
majority) |
|
elected by |
by shareholder meeting |
Shareholders may vest |
||
Kingdom |
||||
shareholders |
with simple majority of |
power to appoint directors in |
||
|
||||
|
|
votes cast |
board, but removal rights still |
|
|
|
|
apply mandatorily |
|
|
|
|
|
To enable us to assess the real-life effect of the legally defined duties of directors more fully, we have analysed the effective distribution of powers within the corporate entity. In this context, we first focus on the appointment and dismissal rights of shareholders in relation to board members. Significant differences exist across different Member States in relation to shareholders’ rights to remove directors without cause, i.e. without any proof of improper conduct on the part of the director.
One must tread carefully in interpreting this data, however. Where ownership is concentrated, the legal allocation of appointment and removal rights does not typically have a significant effect on the accountability of directors or the influence shareholders have over a company’s affairs. High ownership concentration is still the norm in most Member States, including, to a certain extent for listed companies.
The data summarised above is thus of particular importance for listed companies with a relevant level of share ownership dispersion.
Although the company laws of all European jurisdictions enable a well-coordinated shareholder body to ultimately decide on the composition of the board of directors, the degree to which law “insulates” managers from immediate shareholder influence can have an important impact on directors’ behaviour. Even where a jurisdiction mandates the management of the company in the interest of all stakeholders, a credible threat of being removed by one of the constituencies (i.e. the shareholders) should be expected to influence the relative weight a director will assign to the different stakeholders’ interests when making business decisions. The effects of such decision rights can, for instance, play an important role in a board’s reaction to a hostile takeover offer.
20 Directors’ Duties and Liability in the EU