Joint-stock company with one-tier corporate governance system: theory, practice and samples
Dr. Anja Strojin Štampar, senior counsel, and Domen Romih, senior tax manager, published a monograph entitled (with introduction by prof. dr. Krešimir Puharič) Joint-stock company with one-tier corporate governance system: theory, practice and samples.
The one-tier corporate governance system of a joint-stock company stricto sensu was introduced into the Slovenian legal system only in 2006 with the amendment to the Slovenian Companies Act (ZGD-1). It has only been enacted for joint-stock companies but not for other legal forms of capital companies. The one-tier corporate governance system was introduced into the Slovenian legislation following the adoption of Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European Company (SE). The shareholders of a joint-stock company established in the Republic of Slovenia can thus choose between a one-tier corporate governance system with a board of directors and a two-tier corporate governance system with a supervisory board and a management board. The one-tier corporate governance system can be established at the very formation of a joint-stock company or later on by amendments to the company’s articles of association.
The monograph provides a comprehensive study of the one-tier corporate governance system of a joint-stock company under the Slovenian law. The authors present a systematic study of all aspects of activities of the board of directors and executive directors, including the terms of appointment and decision-making, division of powers and required duty of care. Special consideration is given to company’s representation and its limitations as well as to binding instructions which are typical for the one-tier corporate governance system. The analysis includes also the liability of shareholders when they actively engage in business decision-making as instruction-makers. It also provides relevant references to two-tier corporate governance system.
In the monograph, the answers to the following questions are presented:
1. How does the board of directors operate?
2. What are the non-transferable/inherent and transferable powers of the board of directors?
3. Who has the power of representation in a joint-stock company with one-tier corporate governance system?
4. How do the rights and duties of a member of the board of directors differ from the rights and duties of a supervisory board member?
5. What is the difference between the rights and duties of an executive director and a management board member?
6. How can members of the board of directors (non-executive directors) and executive directors regulate their personal relationships with the company?
7. How to reward members of the board of directors (non-executive directors) and executive directors?
8. What are the rights and obligations of employees’ representatives in a one-tier corporate governance system?
9. What actions of the members of the board of directors and executive directors are considered a violation of the due standard of care in the performance of their tasks?
10. How can shareholders influence the conduct of company affairs and what are the consequences of their actions?
11. What are the fiscal features and benefits of a one-tier corporate governance system?
In a one-tier corporate governance system, the autonomous regulation (company’s by-laws and articles of association) plays an important role in the regulation of internal relationships, since the lawfully permitted level of self-regulation is higher than in the case of a two-tier corporate governance system. Therefore, the monograph also contains basic samples of articles of association and of rules of procedure for the board of directors.
From the review of prof. dr. Borut Bratina:
»The respective monograph will fill the gap in scientific literature in the field of the one-tier corporate governance system, which is in Slovenia usually dealt with on a professional level. For this reason, this monograph will be a welcome reference for judicial practice and attorneys at law and, of course, also for corporate lawyers who must regulate corporate governance system with internal acts and by-law within each particular company.«
From the review of prof. dr. Sergeja Slapničar:
»The author examines the topic in a profound, scientific manner. In her work, she intertwines her own experiences from practice, her own and foreign comments, her own empirical analysis of the remuneration of members of the board of directors and gives recommendations of good practice in a manner that is understandable to professional readers. […] The monograph offers all information about a one-tier corporate governance systems in one place, therefore it will be a useful tool for lawyers and economists in practice.«
The monograph was published by the New University Publishing House.