Perspectives in Company Law and Financial Regulation by Michel Tison & Hans De Wulf & Christoph Van Der Elst & Reinhard Steennot

Author:Michel Tison & Hans De Wulf & Christoph Van Der Elst & Reinhard Steennot
Language: eng
Format: epub
Publisher: Cambridge University Press
Published: 2009-10-23T04:00:00+00:00

2. Freedom to organize and operate management structures

The Luxembourg legislator has taken advantage of the arrival of the SE to allow all sociétés anonymes to opt for a two-tier management system with both a management board and a supervisory board. Few companies appear to have taken up the option so far but a large number have set up management committees with powers far beyond those needed to carry out day-to-day management. In banking the committee is almost unavoidable if there is to be compliance with the ‘four eyes criterion’ (Vieraugenprinzip). At present, under the 1915 Act the board of directors of a société anonyme can permanently delegate day-to-day management only.

The Bill proposes that management committees should be officially recognized and be subject to rules close to those adopted in Belgium in 2002, which allow the articles of association to permit boards of directors to delegate their management powers to a management committee without this impinging on the company’s general policies or on any of those areas that are by law reserved to the board of directors.18 Where such delegation occurs, the board of directors is required to supervise the management committee. To prevent objections to a potential conflict of powers, which Belgian law has not prevented, the Bill is careful to point out that powers delegated to a management committee would be exercised by that committee alone. In other words, the board of directors would not be able to reserve any residual authority in those areas. For the protection of third parties, the Bill also states that any restrictions placed on the management powers delegated to a management committee and any distribution of duties among management committee members could not be enforced against third parties. The conflict of interests regime that applies to members of boards of directors and management boards would be transposed to apply also to members of management committees.19

Other sections of the Bill aim to facilitate the running of management bodies and their decision-making processes. For example, it is suggested that circular resolutions by boards of directors, which are already common practice, should be formally recognized. Directors, like the members of the supervisory boards of sociétés anonymes, but unlike the members of management committees, would as a result be able without fear to take unanimous decisions in writing so long as this is allowed in the articles of association.20 There would be no need to justify the procedure on the grounds of emergency, as is required under Belgian law.

Preceding the recent EU directive on shareholder rights,21 the Bill would enable shareholders outside the Grand Duchy to take part in the general meetings of Luxembourg companies by videoconference or any other remote method that ensures effective participation. An original presumption is that general meetings of shareholders held using these techniques would be deemed to be held at the company’s registered office. The Bill simply requires that at least one shareholder or his proxy is physically present in Luxembourg.22

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