The Board of Directors (Supervisory Board), as a general rule, is not among the mandatory management bodies that must be established in a Corporation. However, in practice, a three-tier system of management bodies in a Corporatoin - including an intermediate link between the general meeting of shareholders and the executive body, the Supervisory Board—has become increasingly in demand in recent years.

Why is that? In which cases must a Supervisory Board be established, and in which cases is its creation advisable?

What should be considered when developing the Charter provisions that regulate issues related to including the Supervisory Board in the management system of a business entity?

Which provisions are better established at the level of an internal regulatory act - namely, the Regulation on the Supervisory Board?

What should be considered when forming the composition of the Supervisory Board, and what are the specifics of the procedures for electing (re-electing, additionally electing) members of the Supervisory Board?

What is important to consider when prematurely terminating the powers of one of the Supervisory Board members? Under what circumstances does the Supervisory Board lose its legitimacy in such cases and become unable to make decisions on matters within its competence?

What is the term of office of the Supervisory Board, and what are the legal consequences of decisions made by the Supervisory Board after the expiration of such a term?

Our experts, counsel Alena Salei and senior lawyer Yulia Shuba, explore these questions and more in this article.