Conseil du Surveillance
A supervisory board is part of the leadership of some kinds of companies in France. These companies use something called a “dual board” system. This means they have two separate boards that lead the company.
The supervisory board keeps an eye on the management board. The management board handles the day-to-day running of the company. But the supervisory board watches what they do. They ensure the management board is doing a good job leading the company.
Members of the Supervisory Board
The people on a supervisory board are called supervisory board members. Another word for them is “supervisors”. Most of the time, supervisory board members are chosen by the company’s shareholders.
Shareholders are the people who own little pieces of the company called “shares.” When the shareholders meet, they vote to decide who should be on the supervisory board.
The supervisory board has to have at least three people on it. But it can have as many as 18 people. It depends on how big the company is.
What Does the Supervisory Board Do?
You can think of the supervisory board as being like a kid’s parents. The management board is like the kid. The kid makes choices every day about what they want to do. The parents keep an eye on the kids to make sure they’re making good choices. If the kid does something wrong, the parents fix the problem.
Appointing and Removing Management Board Members
One of the supervisory board’s biggest jobs is choosing who gets to be on the management board. Management board members are also called “directors.”
The supervisory board has meetings about who would be good directors. When they find someone they like, they appoint them to the management board. “Appoint” means they give them the job.
The supervisory board also has the power to remove directors from the management board. If a director isn’t doing well, the supervisory board can take away their job. This is called “dismissing” or “removing” the director.
Supervising and Advising the Management Board
The supervisory board’s main job is to supervise the management board. But they do more than just watch. They also give advice.
The management board has to tell the supervisory board what they’re doing. They give reports about how the company is performing. The supervisory board reads these reports carefully.
If the supervisory board thinks the management board could do a better job, they advise them. For example, they might say, “We think you should spend more on advertising.” Or “We think you need to hire more people in the factory.”
The management board doesn’t always have to do what the supervisory board says. But they usually listen to the advice carefully. They know the supervisory board has a lot of knowledge and experience.
Representing Shareholders and Stakeholders
The supervisory board has an important job. They must ensure the management board does what’s best for the shareholders.
Remember, the shareholders are the people who own the company. The management board has to make choices that help the company make money. This is good for the shareholders because it means their shares become more valuable.
However, the supervisory board also has to think about stakeholders. Stakeholders don’t own shares but still care about the company. For example, the company’s workers are stakeholders. People who live in the same town as the company’s factory are stakeholders.
Sometimes, what’s best for shareholders isn’t the same as what’s best for stakeholders. The supervisory board has to find a balance between the two. They have to make sure the management board is being fair to everyone.
Meetings of the Supervisory Board
The supervisory board gets together often to have meetings. Every member of the board comes to these meetings. They talk about important stuff related to the company.
There are a few reasons why the supervisory board might have a meeting:
- To talk about how the company is doing. The management board shows them financial reports and stuff like that.
- To make big choices. Like if the company wants to buy another company. Or if they want to sell part of the company. The supervisory board has to agree to these kinds of things.
- To choose or remove directors. If they need a new director on the management board, they’ll have a meeting to choose one. If they want to dismiss a director, they have a meeting for that too.
- To change the rules for the management board. The supervisory board decides what the management board is and isn’t allowed to do. Sometimes they change these rules.
The chairman of the supervisory board is in charge of the meetings. They decide when to have meetings. They also lead the conversation during the meetings.
Why Have a Supervisory Board?
You might be wondering why companies have supervisory boards. Wouldn’t it be easier to just have one board?
There are a few reasons why the dual board system can be a good idea:
1. It Provides Oversight
The supervisory board’s job is to watch over the management board. This helps make sure the management board isn’t doing anything sneaky or illegal.
It’s kind of like how the government has people who watch over other parts of the government. They’re there to make sure everyone is following the rules.
2. It Brings in Outside Expertise
The people on the supervisory board are usually pretty smart and experienced. They often have worked in business for a long time. Some of them might be experts in things like law or accounting.
Having these people on the supervisory board means the company can get advice from experts. The management board can learn a lot from them.
3. It Represents Different Interests
In a company with just one board, that board has to make all the decisions. But sometimes the different people in a company want different things.
Like maybe the shareholders want the company to make as much money as possible. But the workers want the company to pay them more. The supervisory board can help balance these different interests.
They can make sure the management board thinks about everyone, not just the shareholders.
