Supervisory Board of a limited liability company in the light of the proposed amendment to the Commercial Companies Code
On August 5, 2020, a draft act amending the Commercial Companies Code and certain other acts by the Minister of State Assets was sent for public consultation, which introduces a number of significant changes to the existing regulations.
The following sections present the most important elements of the proposed changes relating to the supervisory board of a limited liability company:
- In performing his duties, a member of the supervisory board or the audit committee should exercise due diligence resulting from the professional nature of his business and maintain loyalty to the company.
- A member of the supervisory board or the audit committee may not disclose the company’s secrets even after the expiry of his mandate.
- The Supervisory Board is obliged to prepare and submit to the shareholders’ meeting an annual written report for the previous financial year (Supervisory Board report).
- In order to perform its duties, the Supervisory Board may demand that the Management Board, proxies, employees of the company or persons employed by the company on the basis of a contract for a specific task, contract of mandate or any other contract of a similar nature, prepare or provide any information, documents, reports or explanations necessary to supervise the company, in particular those relating to the company’s operations or its assets. The request referred to in the first sentence may be accompanied by information, reports or explanations concerning subsidiaries and associated companies, if the addressee has the necessary knowledge.
- The information, documents, reports and explanations referred to above should be provided to the supervisory board without delay, but not later than two weeks from the date of the relevant request to the authority or person responsible. The board of supervisory directors may set a longer period to respond to its request.
- The Management Board may not restrict the access of supervisory board members to information, documents, reports or explanations requested by them.
- Where the company’s financial statements are subject to a statutory audit, the supervisory board shall be obliged to notify the key auditor who audited the company’s financial statements of the date of the meeting on matters specified in the Act. The key certified auditor is obliged to participate in the meeting of the supervisory board referred to above, as well as present an audit report to the supervisory board during the meeting, including a discussion of the basis of the statement relating to the company’s ability to continue operations and answer questions from members of the supervisory board.
- The Supervisory Board may establish ad hoc or permanent committees of the Supervisory Board, consisting of at least three members of the Supervisory Board, to perform specific supervisory activities (committees of the Supervisory Board). The committee of the supervisory board shall assist the work of the supervisory board. The exercise of this power by the board of supervisory directors does not relieve them of their responsibility to exercise supervision.
- If the articles of association so provide, the supervisory board may adopt a resolution to examine, at the company’s expense, a specific issue concerning the company’s activity or its assets, by an appointed advisor (advisor to the supervisory board).
- The supervisory board may only be advised by an entity having the expertise and qualifications necessary to examine the matter as determined by the supervisory board and which ensures the preparation of a reliable and objective audit report.
- The work of the board of supervisory directors shall be managed by its chairman, who shall be responsible for the proper organisation of the body’s work, and in particular for convening meetings of the board of supervisory directors. The articles of association may grant certain powers related to the organisation and manner of performance of activities by the supervisory board also to other members.
- Meetings of the supervisory board shall be convened by means of invitations, in which the date, time and place of the meeting and the proposed agenda shall be marked, as well as the use of means of direct remote communication when holding the meeting. The articles of association may specify the manner and minimum deadline for inviting to the meeting of the supervisory board.
- The board of supervisory directors may also meet without being formally convened if all members agree and do not object to the inclusion of particular items on the agenda.
- Minutes shall be taken of the meeting of the Supervisory Board. The provisions concerning the minutes of the supervisory board shall apply accordingly.
- Votes of the Supervisory Board shall be open unless the Articles of Association or the Regulations of the Supervisory Board provide otherwise.
- Resolutions of the Supervisory Board shall be adopted by an absolute majority of votes, unless the articles of association provide otherwise.