#Board Meetings Lawyer in France

Your situation and your risks

Your company has a board of directors (conseil d’administration) or a supervisory board (conseil de surveillance). In an SAS (simplified joint-stock company), a board may also exist if the articles of association provide for one, since they set the conditions under which the company is managed (Article L. 227-5 of the French Commercial Code (Code de commerce) (in French)). These bodies do not run the business day to day: in an SA (French public limited company), that task falls to the chief executive officer (directeur général) or to the management board (directoire).

A poorly prepared meeting weakens the decisions taken: irregular notice, quorum not reached, incomplete minutes. It also exposes the board members. Directors and the chief executive officer are liable to the company or to third parties for three types of failings. These are breaches of the rules applicable to SAs, breaches of the articles of association and mismanagement (Article L. 225-251 of the Commercial Code (in French)).

The legal framework for board meetings in France

The board of directors sets the direction of the company’s business and oversees its implementation (Article L. 225-35 of the Commercial Code (in French)). It deals with any matter concerning the proper running of the company and carries out the checks it considers appropriate. The chair or the chief executive officer must provide each director with the documents and information needed to perform their duties. The chief executive officer, for their part, holds the widest powers to act in all circumstances on behalf of the company. They exercise those powers within the limits of the corporate purpose and of the powers of the board and of the general meetings (Article L. 225-56 of the Commercial Code (in French)).

• Notice: the articles of association set the rules for convening the board and for its deliberations. If the board has not met for more than two months, at least one third of its members may ask the chair to convene it. The request must set out a specific agenda. The chief executive officer has the same right, and the chair is bound by these requests (Article L. 225-36-1 of the Commercial Code (in French)).
• Quorum and majority: the board can only deliberate validly if at least half of its members are present, and any clause to the contrary is deemed unwritten. Decisions are taken by a majority of the members present or represented, unless the articles require a larger majority (Article L. 225-37 of the Commercial Code (in French)).
• How meetings are held: unless the articles of association or the internal rules provide otherwise, directors who take part by a means of telecommunication that allows them to be identified and ensures their effective participation are deemed present. The articles may also provide for written consultation, which each member may oppose, and for postal voting. Unless the articles provide otherwise, the chair of the meeting has the casting vote in the event of a tie.
• Minutes: the board’s deliberations are recorded in minutes kept in a special register with numbered and initialled pages, on numbered loose sheets or in electronic form with an advanced electronic signature (Article R. 225-22 of the Commercial Code (in French)). The minutes state which directors were present, deemed present, excused or absent. They are signed by the chair of the meeting and by at least one director (Article R. 225-23 of the Commercial Code (in French)).

In an SA with a management board, the supervisory board exercises ongoing oversight of the management board’s running of the company (Article L. 225-68 of the Commercial Code (in French)). The management board reports to it at least once a quarter. The articles may make certain transactions subject to the supervisory board’s prior authorisation. The management board, which holds the widest powers to act on behalf of the company, deliberates under the conditions set by the articles (Article L. 225-64 of the Commercial Code (in French)).

How we can help

• Reviewing your articles of association and internal rules: notice, quorum, majorities, video conferencing, written consultation.
• Preparing the meeting schedule, the agendas and the papers sent to board members.
• Drafting proposed resolutions and minutes, and organising how the register is kept.
• Identifying decisions that require the board’s prior authorisation, such as sureties, endorsements and guarantees or related-party agreements (conventions réglementées).
• Advising directors on the extent of their liability and on how to act in the event of disagreement.
• Aligning the board’s work with your general meetings (in French) and, where relevant, with a procedure for removing a director.

What is at stake for you

A board that follows its operating rules takes decisions that are harder to challenge. The minutes register keeps a record of discussions and votes. It may be requested during an acquisition due diligence or a fundraising round. For directors, careful preparation of meetings shows that they performed their duties on an informed basis. Every situation is different: the organisation of the board must be tailored to your company’s legal form and shareholder structure.

Every situation is different: the information on this page is general and does not replace legal advice tailored to your case. The firm makes no promise of outcome; it commits to the means it deploys.