Naslov
PERSONAL REQUIREMENTS FOR SUPERVISORY BOARD MEMBERS AND CONFLICT OF INTERESTS

Autori
Brnabić, Ratko ; Kuzmanić, Zvonimir

Izvornik
Economic and Social Development, International Scientific Conference on Economic and Social Development: The Legal Challenges of Modern World (1849-7535) 4 (2018), 31; 376-384

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
Company law, Supervisory Board, Management Board, Dual board mandates, Conflict of interests.

Sažetak
Question of current and future (potential) conflicts of interests is of great practical importance for the work of the already established Supervisory Board in the company. The reason for this lays not only in the fact that neutrality of the conflicting Supervisory Board member is endangered, but also in the other disadvantages to the normal functioning of the Supervisory Board in general. Spectacular lawsuits involving large companies have increasingly focused public attention in Europe on the functioning and functional deficits of the supervisory bodies. Solely due to the "stricter duties of care and action" discussed in the wake of this, the standards that are applied to a responsible supervisory board activity have increased significantly. The Croatian Companies Act has regulated the post of member of the Supervisory Board as a secondary function and therefore assumes that the member of the Supervisory Board still has one main occupation (as a member of the Management Board of another company, member of a law firm etc.) or holds supervisory board mandate in the other Corporation. However, dual board mandates have considerable potential for conflict because the dual mandate holder is basically committed to the interests of two companies (servant of two masters). This loyalty conflict is particularly acute in the group of Companies. Dual board mandates holder always has to consider the interests of both “masters”: while acting in the board of the parent company he must consider only their interests and in the board of the daughter-company exclusively their interests. Because of this separation of obligations, he can't rely on the fact that a breach of the obligations of an organ in one area is justified in order to comply with the duties of the other organ. Furthermore, the norm in provision Art. 261 of Croatian Companies Act states that a member of the supervisory board cannot at the same time be a member of the executive board, authorized signatory or authorized representative of the company for the entire business. That norm provides for the possibility that the supervisory board appoints individual members of the executive board for a limited period of time to substitute missing or prevented members of the management board. These provisions are defined as the expression and the effectuation of the dualistic system and of the rule of separation of functions between the Management Board and the Supervisory Board. The provision deals with the fact that the executive and supervisory bodies are separated as such, but that the functions of both organs are actually carried out by the same persons, and therefore unbiased and effective supervision of the management is no longer guaranteed. This paper will cover those issues and provide for possible legal solutions.

Izvorni jezik
Hrvatski

Znanstvena područja
Pravo

POVEZANOST RADA