Board meetings and the work of the board as a whole are subject to strict regulations, which are created in advance by the enterprise. In this normative document, all the subtleties of the central managers of the enterprise are considered. You will learn how this system works from the text below and what rights managers have.
Formation of the Board of Directors
The formation of the Board of Directors, as a rule, makes sense with a large number of members of the Company. In this case, part of the powers of the General Meeting of Participants is transferred to him. Thus, the need for the frequent gathering of the Society’s participants at General Meetings is removed, which helps speed up decision-making on specific issues of the organization’s activities.
The procedure for the formation of the Board of Directors is determined by the provisions of the Charter of the Company. The decision on the formation of the Board of Directors and the choice of its members is made at the General Meeting of Participants. Such decisions must be taken by a simple majority of votes.
Competence of the Board of Directors
The Charter of the Company determines the competence of the Board of Directors. The Articles of Association of the Company may provide for issues within the competence of the Board of Directors that do not contradict the Laws.
The competence of the Board of Directors may include:
- Determination of the main activities of the enterprise
- Resolving issues related to the formation of the executive bodies of the Company.
- Early termination of powers of administrative bodies.
- The decision to transfer the function of the sole executive body to a management company, individual entrepreneur, the terms of the contract with them, and the amount of remuneration and compensation.
- Determining the amount of remuneration of the sole executive body and/or members of the collegial administrative body.
- Making decisions on participation in associations of commercial organizations, and associations.
- The auditor’s selection and approval, his remuneration, and appointment of the audit.
- Development, approval, and adoption of the Company’s internal documents regulating its activities.
- Creation, the opening of branches and representations.
- Encouraging related party transactions as well as significant transactions.
- Solving issues related to the convening of the General Meeting, its preparation, and holding.
- Other issues that the Charter of the Company does not refer to are the competence of the General Meeting and the executive body.
Suppose the competence of the Board of Directors includes issues related to the convening and holding of the General Meeting of Participants. In that case, the executive body (sole or collective) acquires the right to demand the holding of an extraordinary General Meeting. The administrative body does not have such a right if the Company does not have a Board of Directors.
Rights and restrictions for members of the Board of Directors
If the management apparatus (board of directors) includes people who are not members of the organization, they can participate in meetings, but their vote is considered exclusively deliberative.
Transfer of voting rights is not possible – no member of the board of directors can allow someone else to decide for him.