The selection and appointment (and dismissal) of the management board is one of the most important tasks or responsibilities of the supervisory board. The Chairman and Members of the Board are appointed by the Supervisory Board pursuant to Article 268 of the Companies Act. A supervisory board must select a competent management board that will run the company successfully.
It is recommended that the supervisory board defines the procedure to select the management board in its Rules of Procedure or any other document. Professionally conducted procedures and criteria for recruitment of the management board are in the interest of supervisory bodies, as they enable argumentation for their selection and the implementation of due diligence, while rejecting any doubts as to their professional conduct and references as well as the suitability of their selection.
Ordinarily, a supervisory board decides on the re-election of a current board member or the search for a new candidate for a board member a year or no less than 6 months before the expiry of the term of office. In case of a dismissal of the chairman or member of the management board, the supervisory board immediately initiates a procedure to search for a new chairman or member.
Best practice recommendations:
- Practical Guidance - Diversity Policy of Management and Supervisory Board, 2017
- Practical Guidance for Members of Management Board’s Recruitment, 2012
Recommended reading, Research and Studies:
- Women directors on the rise – executive positions still going to men, Finland Women Directors and Executives Report 2016
- Beyond The Old Boy´s Network - What´s happening in European boardrooms and a guide to best practices, 2015