In public limited companies with a board of directors, power is divided between the board and the general manager. We will focus here on the operation of the CA of an SA.

operation board of directors sa

Composition of the governing body

The board of directors of a anonimous society , is made up of 3 to 18 people (in exceptional circumstances, the maximum can be increased to 24 for 3 years during a merger). It is important to emphasize that salaried directors are not taken into account in the calculation of these limits.

The law does not require a shareholder to be appointed as a director. However, the statutes of the SA may impose a minimum number of shares to be able to hold this position.

Finally, a chairman is appointed to organize and direct the work of the board of directors.

Appointment of members of the board of directors

Any person (natural or legal) can be chosen as administrator, the legal entity then having to select a permanent representative to fill the position. It is not necessary to be a shareholder, but the articles of association may provide for a minimum number of shares in order to be able to be appointed as a director.

Legislation determines an age limit of 70 years, unless otherwise provided in the articles of association. In addition, there are also cases of incompatibility:

  • a person prohibited from commercial activity cannot be appointed as a director.
  • certain professions are subject to strict rules: auditors, lawyers, notaries, for example.

The first directors of SA are designated in the articles of association for a maximum period of 3 years. Then, they are appointed by the ordinary general meeting and the duration of their mandate cannot exceed 6 years. The election must be entered, on pain of nullity, on the agenda. Unless otherwise provided in the articles of association, directors are eligible for re-election.

In the event of the death or resignation of a director, special cooptation rules apply.

Remuneration of the members of the Board of Directors

In public limited companies with a Board of Directors, the directors are remunerated by attendance fees. The amount is defined by the General Assembly and distributed by the Board of Directors among its members.

Attendance fees received are taxable and are subject to the social package.

In addition to attendance fees, an administrator can receive exceptional compensation for one or more assignments. The latter are taxable in the category of Non-Commercial Profits (BNC) and are not subject to social security contributions.

Directors are not affiliated with any social security scheme and therefore do not benefit from social protection.

Responsibilities and powers of the Board of Directors

The Board of Directors is a management group who determines the strategy and manages the implementation. He may not interfere with the responsibilities of the other bodies of the company (notably the Chief Executive Officer and the Shareholders' Meeting).

Here are the main attributes of the Board of Directors:

  • preparation of the annual accounts and the management report,
  • convening of general meetings,
  • appointment and dismissal of the Chairman of the Board of Directors, the Chief Executive Officer and, where applicable, the Deputy Chief Executive Officers,
  • authorization of agreements entered into between the SA and one of its shareholders or managers holding more than 10% of the share capital.

The operating rules of the Board of Directors

The Board of Directors meets as soon as the interests of the company require it and is responsible for any question affecting the smooth running of the company. It is chaired by a director and must meet at least once a year to examine the annual accounts and convene the annual general meeting.

Convening and meeting arrangements:

The conditions and the form of the convocations are described in the statutes, without mention of an agenda.

An attendance register must be kept and signed by the directors present. It is possible to use videoconferencing or telecommunication means to discuss, except for the examination of the annual accounts.

The decisions :

To make a decision:

  • At least half of the members of the Board of Directors must be present and no clause of the statutes can derogate from it.
  • Decisions are then made at the majority of members present or represented, unless the statutes provide for a higher majority.

The head of the board

The head of the board of directors, appointed from among the directors by the board of directors, is a natural person aged 65 maximum (unless otherwise provided in the articles of association).

The duration of his term of office must not exceed that of his term of office as director, and he may be revoked at any time.

Standards relating to multiple directorships

By law, one person cannot Simultaneously exercise more than 5 positions as director, member of the supervisory board, general manager, member of the management board or sole general manager in French SAs.

However, there are two exceptions:

  • directorships held in controlled companies (only the office held in the parent company is taken into account);
  • positions held in unlisted companies controlled by the same entity, provided that the total number of positions held does not exceed 5.

Rules concerning the combination of directorships and an employment contract

A member of the board of directors cannot be an employee of the company. However, an employee can become a director if he meets these conditions:

  • the employment contract must precede the directorship,
  • the employment contract corresponds to a job actually performed (with functions distinct from the mandate of director, a hierarchical relationship and remuneration distinct from that due as a director),
  • and the number of salaried directors cannot exceed one third of the directors in office.

End of the administrator mission

At the beginning, the representatives can be revoked at any time by the ordinary general meeting (revocation ad nutum). The revocation does not have to be on the agenda to take effect. In principle, no indemnity or compensation is due to the revoked member.

In addition, a director may resign from office without notice and without explanation. However, he may be required to pay damages if his resignation is intended to disrupt the business.

Finally, the administrator functions come to an end:

  • if the mandate is not renewed,
  • if the age limit is exceeded,
  • in the event of death,
  • in the event of transformation or dissolution of the company,
  • or when a case of incompatibility or prohibition occurs.
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