Appointment of a Member of the Board
The general meeting of shareholders usually appoints and dismisses the members of the board of directors. The appointment may be made both at the annual and at an extraordinary general meeting. The articles of association may provide that usually the supervisory board elected by the general meeting and supervising the management of the company appoints the board of directors. The articles of association may also provide that some other party than the general meeting appoints fewer than half of the members of the board of directors. Such a party may be, e.g., a shareholder or the supervisory board. The board of directors itself, the managing director or the auditor may not in these roles, however, appoint board members, who shall be appointed in accordance with the above.
The main principle of the Limited Liability Company Act is that the term of the members of the board of directors is usually until further notice which means that it will terminate at the latest with the conclusion of the general meeting of shareholders deciding on the appointment of a successor member. According to the Limited Liability Company Act, in public limited liability companies the term of office of a board member will always end with the conclusion of the annual general meeting of shareholders following the appointment of the member. It is always possible however to provide the length and the nature of the term differently than above in the articles of association.
A member of the board of director shall be a natural person. For instance another company does not qualify as a member. A board member cannot be under guardianship or have restricted legal capacity or be bankrupt. At least one of the members of the board of directors shall be resident within the EEA. It is possible to apply for an exemption from this requirement with the National Board of Patents and Registration.
The personal information of the members and the deputy members shall be notified to be entered into the Trade Register. The purpose of the Trade Register notifications is to make certain that all third parties can receive correct information on who is allowed to represent the company and who are responsible for running the business.