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it is possible for the preferred share to have voting power beyond
the voting power of the common share. For instance, in I.G. Farben the
preferred shares for many years had ten votes as against one vote for a common
share of equal par value (Articles of Incorporation, Paragraph 24). The
capitalization of an A.G. generally must amount to not less than 500,000 marks.
2. In an A.G. there are two governing boards, one charged with general
supervision, the other with actual management. These two boards are the
Aufsichtsrat, often translated as "supervisory board of directors," and
the Vorstand, often translated as the "managing board of directors."
Sometimes both the Aufsichtsrat and the Vorstand have been translated as "board
of directors." To avoid confusion, the use of the German terms instead of
translations is generally preferred. Generally speaking, these two boards,
taken together, exercise the functions ordinarily performed by the board of
directors of an American corporation. However, taken individually or together,
these two boards are not the precise functional equivalent of the American
board of directors. The general features of the Aufsichtsrat and the Vorstand
in German law and practice in the typical case are as follows:
|
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| AUFSICHTSRAT |
| |
| 3. The Aufsichtsrat is a supervisory board of directors elected by
the stockholders at the annual meeting generally called the
"Generalversammlung" (before 1937) and the "Hauptversammlung" (after 1937).
With some notable exceptions, the members of the Aufsichtsrat appear to
correspond functionally with those members of the board of directors of a major
American corporation who are not members of the executive committee and who do
not participate in the actual, or day-to-day, management of the business. The
formal rights and duties of the Aufsichtsrat under German law include the
election, supervision, and removal of the members of the Vorstand; the general
supervision of the management of the enterprise by the Vorstand; the right to
examine and audit books and accounts; the calling of shareholders meetings; and
the representation of the corporation in dealing with the Vorstand. Of course,
the extent to which the Aufsichtsrat in practice exercises these powers to
influence the activities of an A.G. depends upon a number of factors,
including, for example, who owns or controls the stock. |
| |
| VORSTAND |
| |
| 4. The Vorstand is the executive board of directors which undertakes
the actual management of the corporation generally and represents the
corporation in its dealings with others. The members of the Vorstand can best
be compared functionally with the |
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