a)
General
(i) Division of duties
The board of directors must elect a chairman and at least one vice chairman who may replace the chairman in case of his/her absence every year. It is possible that the articles of association may include a provision whereby the election of the chairman and the vice chairman or one of them can be made by the general assembly.
(ii) Committees and commissions
The board of directors may establish committees and commissions in order to (a) monitor the course of business (b) to have reports prepared regarding matters that are presented to the board (c) enforce its decision and (d) to execute internal audit activities in the company.
(iii)
Delegation of management
The board of directors may be authorized to delegate management partially or fully to one or more board members or to a third party. This delegation must be made through an internal regulation and included in the articles of association.
This regulation organizes the management of the company. It defines the duties required for management, indicates their positions, and particularly specifies who is subordinated to whom and who is obliged to provide information.
Based on the request the board of directors must inform the shareholders and certain creditors of this regulation in writing. If the management is not delegated, the company is managed by all board members.
(iv)
Duty of care and duty of
loyalty
In accordance with the new TCC the board members and third parties in charge of management are liable for performing their duties with due care of a prudent manager and to protect the company's interests in good faith.
The prudent manager is a new concept in the new TCC. In accordance with this concept, the board members and third parties in charge of management must exercise reasonable care, skill and diligence in performing their duties. This means the care, skill and diligence that would be exercised by a reasonably diligent person with the general knowledge, skill and experience that may reasonably be expected in carrying out the functions in relation to the company.
