Appointment, dismissal and composition of Supervisory Board
Election of Supervisory Board members
Supervisory board members representing the interests of shareholders are elected by the General Meeting. Before election at the General Meeting, the candidate nominated for a supervisory board members must present their past professional development and the work currently performed as well as all circumstances that might lead to conflicts of interest or their bias. The nominated candidate may provide their presentation in writing, while the presentation of the candidate nominated for a supervisory board member is made by the person who nominated the latter.
The procedure to select candidates for supervisory board members and the preparation of a proposal for a General Meeting resolution on the appointment of supervisory board members is transparent and laid down in advance.
Employee representatives in the supervisory board are elected and dismissed by the workers’ council, which also informs and General Meeting of its decision.
Legal conditions for Supervisory Board member
The statutory general conditions for membership in SB are laid down in Article 255 of the Companies Act:
- a candidate was not sentenced res judicata for a crime against the economy, employment relationship and social security, legal transactions, property or for an environmental crime in the 5 years preceding the given moment or the prison sentence was more than 2 years ago;
- during candidacy, a candidate is not subject to an occupational ban as a result of an imposed security measure;
- as a member of the managing or supervising body of a company that has been subject to a bankruptcy proceeding, a candidate was not convicted res judicata to the payment of indemnification to creditors pursuant to the provisions of the act or such a sentence became final more than 2 years ago;
- a candidate may be a member of a SB or MB in no more than 3 companies at the same time.
Criteria for a Supervisory Board member
The assessment of the suitability of a candidate for a supervisory board member takes into account legally compliant best practice recommendations and, furthermore, compliance with the following terms and conditions (Slovenian Corporate Governance Code for Listed Companies, 2016):
- adequate personal integrity and business ethics,
- min. university-level education (old programme) or Master’s degree in a profession (2nd Bologna level) ,
- adequate experience in supervision, corporate governance or management, or work experience in the company’s industry,
- comprehensive business and relevant professional knowledge,
- the ability to act and make decisions in the company’s long-term interest, thereby subduing to this cause potential alternative personal or other individual interests (of third persons, employees, the management board, shareholders, the public and the government),
- candidates are not managers, supervisors, representatives or consultants of competitive companies in the industry of the respective company’s primary business, and they are also not significant shareholders or stakeholders in such competitive companies,
- they have sufficient time or will have sufficient time once they are appointed,
- they are capable of efficient communication and teamwork,
- they are prepared to undertake continuous training and professional development,
- they have a certificate evidencing their specialized professional competence
- for membership on a super - visory board, such as a Certificate of the Slovenian Directors’ Association or another relevant certificate.
When selecting SB members, it is typically observed whether a candidate further develop their expertise, spreading it further to complementary areas. Candidates also prove their professional qualifications with acquired qualification for the pursuit of the supervisory function (Directors Certification).
Supervisory Board composition and diversity
Pursuant to the law, a supervisory board comprises at least 3 members and its diversity is laid down by a company’s Articles of Association. Its composition should be diverse. When composing a supervisory board, it is required to take into account the expertise, experiences and skills that complement members of the supervisory board.
The number of employee representatives in a supervisory board is laid down in the company’s Articles of Association, but cannot be less than one third of the members and no more than one half of all supervisory board members at the company. A board in one-tier system has at least one member who is an employee representative. The number of employee representatives in a board is laid down in a company’s Articles of Association, but cannot be less than one employee representative from three board members.
Article 70(3) of the Companies Act: The business report is to also show a description of the diversity policy implemented in relation to representation in management and supervisory bodies, i.e. with respect to aspects, such as gender, age or education, and an indication of the goals, implementation method and the achieved results of the diversity policy in the reporting period. If the diversity policy is not being implemented at a company, this must be indicated.
Dismissal of Supervisory Board members
- Pursuant to Article 275 of the Companies Act (ZGD-1), the General Meeting may dismiss the supervisory board members it had elected before the expiry of their term of office. A dismissal resolution requires at least a three-fourth majority of the votes cast. The Articles of Association may lay down a higher majority and other requirements;
- Pursuant to Article 79 of the Worker Participation in Management Act (ZSDU), the workers’ council dismisses employee representatives who are SB or members of the board or members of their committees, and informs the General Meeting of its decision.
The role of SDA in Supervisory Board recruitment
- it does not intervene in the accreditation and selection of candidates;
- it promotes professional ethics, criteria for membership in SB, and best practices in the selection of candidates;
- it provides regular information to its members regarding current calls by companies or a state administrator to submit candidacies for membership in SB;
- it provides training for potential candidates for membership in a supervisory board and committees, and Directors Certification: SDA Certificate and A training certificate for Supervisory Board Members and Board of Directors (A training certificate for Supervisory Board Members and Board of Directors);
- it enables all those seeking suitable candidates for SB members access to a register of individuals who have obtained "A training certificate for Supervisory Board Members and Board of Directors" and the "SDA Certificate".
*SDA obtains information about currently open calls/tenders from publicly made calls or through a direct notice by companies. All interested companies are invited to inform us of any open calls at: firstname.lastname@example.org.
Application for the register of candidates for SB membership at the Slovenian Sovereign Holding
The Slovenian Sovereign Holding (SSH) invited the interested experts and individual to submit their applications to be entered in the database of potential candidates for membership in supervisory bodies at companies capital asset of the State.
The procedure to select candidates for supervisory board members comprises of an accreditation procedure, i.e. a selection of suitable candidate for SB members, and a nomination procedure to select a short list of candidate for members of the supervisory bodies of a individual company with respect to the specificity of their professional qualification, target profile of the supervisory board and the needs of a particular company. The SSH HR Committee is an advisory body of the Management Board of SSH that carries out the implementing procedures to obtain candidates for members of the supervisory boards of companies with capital assets of the State, procedures to evaluate such candidates and procedures for their accreditation.
- Rules on the conditions, criteria and procedure for the evaluation, assessment of suitability and selection of potential candidates for members of the supervisory boards of companies with capital assets of the State.
>>> only in the Slovene language: Pravilnik o pogojih, merilih in postopku za vrednotenje, ugotavljanje primernosti in selekcioniranje potencialnih kandidatov za člane organov nadzora družb s kapitalsko naložbo države.
- Government decision on mandatory training certificate qualifications for members of supervisory boards for members of supervisory boards who were appointed in such bodies by the Government of the Republic of Slovenia, 2005
>>> only in the Slovene language: Sklep Vlade RS o obvezni pridobitvi Potrdila o usposobljenosti za člane nadzornih svetov in upravnih odborov družb, za vse člane NS in UO, ki jih je v te organe imenovala Vlada RS, 2005
- Companies Act (ZGD-1), Official Gazette of the Republic of Slovenia, No. 65/09 - ZGD-1- official consolidated text 3 (amendments)
- Worker Participation in Management Act (ZSDU), Official Gazette of the Republic of Slovenia, No. 42/1993 (amendments)
Best practice recommendations:
- Practical Guidance - Diversity Policy of Management and Supervisory Board, 2017
- Corporate Governance Code for State-Owned Enterprises, 2017
- Slovenian Corporate Governance Code for Listed Companies, 2016
- The Corporate Governance Code for Unlisted Companies, 2016
- Statement of independence of a member of SB, 2017
- SDA Code of Professional Ethics. 2014
- Women directors on the rise – executive positions still going to men, Finland Women Directors and Executives Report 2016
- Beyond the Old Boys' Network - What´s happening in European boardrooms and a guide to best practice, 2015
- Report - The Board Selection Process: assembling the right pieces for a dynamic, effective and balanced board, 2014
- ecoDa’s Position Paper on the proposal for a Directive on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures, 2013
- What Makes an Exceptional Independent Non Executive Director?, The Korn/Ferry Institute, 2012
- ecoDa's Response to the EU Commission Consultation on Gender Equality in Corporate BoardRooms, 2012
- ecoDa demands better action plans from companies to improve gender diversity on corporate boards, 2012
- Report - ecoDa's Conference: Diversity: Going over Board?, 2011