Independence of the SB

Independent supervisory board members are deemed to be those members who act independently in their operations and decision-making.

Dependent members are always deemed to be supervisory board members who have a close economic relation with the company, its management board or major shareholders. An independent member immediately informs the supervisory board of the occurrence of facts changing their compliance with the criterion of independence.

In practice, a selection of different circumstances and actions was developed that represent a position of dependence for a supervisory board member and are taken from the European recommendation in Appendix B3, Slovenian Corporate Governance Code for Listed Companies, 2016.

Legislation on independence

Pursuant to Article 38.a of the Companies Act, a member of a management or supervisory body, a procurator or executive director of a joint stock company and a manager, supervisory board member or a procurator of a liability limited company must avoid any conflict of their own interest or duties with the interests or duties of the company managed or supervised.

Definition of a conflict of interest and actions to be taken upon a conflict of interest

Conflict of interests: a situation when a person's impartial and objective performance of tasks or decision taking solely in the company's interest within the function he is performing is compromised due to personal economic interests, his family members' interests, or due to special bias or any other interests related to other natural or legal persons (Slovenian Corporate Governance Code for Listed Companies, 2016) No recommendation can capture all circumstances that may occur in practice. Every supervisory board member must assess alone whether any such conflicts of interest exists in their case.

Actions in the event of a potential non-relevant conflict of interests of a supervisory board or committee member (Slovenian Corporate Governance Code for Listed Companies, points 23.5, 23.6, and 23.7), are predominantly:

  • the relevant member of the supervisory board discloses the conflict of interests to the supervisory board;
  • the relevant member abstains from voting on all subjects where the member is or could be affected by the conflict of interest;
  • the relevant member leaves the supervisory board meeting and does not participate in the discussion on subjects where the member is or could be affected by the conflict of interest;
  • by making an express written statement or a statement, which is on the  member’s request recorded in the supervisory board meeting minutes, the relevant member in advance waives his right to receive materials and information on the subject in which a conflict of interest is recognised.

Statement of independence of a member of SB

Every supervisory board member signs and submits a statement of compliance with individual indents from Appendix B3, Slovenian Corporate Governance Code for Listed Companies, to the supervisory board once a year, upon their appointment and upon each change, thus defining their position to the existence of individual conflicts of interests pursuant to the criteria laid down in Appendix B3, and undertakes to inform the supervisory board immediately of any new potential conflicts of interest.

Best practice recommendations:

Research and Studies:

>>> more in Slovene language: Poročilo o upravljanju javnih delniških družb 2005 – neodvisnost članov nadzornih svetov v Sloveniji, 2005

Recommended reading:


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