Corporate Governance and Organization of the Management Body
The corporate governance domain tests how decision-making authority is distributed inside a company, who may bind it, and what the first head can sign alone. Expect questions on the competences of the general meeting, the board of directors and the executive body, and on conflicts of interest.
The three levels
In a joint-stock company the general meeting of shareholders is the supreme body; its exclusive competence - charter amendments, reorganisation or liquidation, number of shares, profit distribution, approval of annual financial statements, election of the audit commission - cannot be delegated. The board of directors is the supervisory and strategic body: it approves strategy, appoints and dismisses the executive body and decides larger transactions. The executive body (sole - the first head - or collegial) runs day-to-day operations. In an LLP the participants' meeting and the executive body perform the same functions, and a sole founder's decisions are recorded in writing.
Authority of the first head
The first head acts without a power of attorney: represents the company, concludes transactions within the competence fixed by the charter, approves the staffing table, hires and dismisses staff, issues powers of attorney. That authority is limited by law, charter and internal documents, and a transaction outside the scope can be challenged.
Conflicts and related-party deals
A first head with a personal interest must disclose it and abstain; related-party transactions need prior consent of the board or the meeting. Independent directors and a corporate secretary are required in the cases set by the law on joint-stock companies and by listing rules.
Worked example
The first head signs a sale of a workshop worth 30% of book assets with no board consent. The law treats the deal as major; concluded without the required consent, it is contestable on the company's claim. The safe route is to table it for prior consent.
Traps
Assuming the first head may do anything not expressly forbidden; ignoring lower thresholds written into the charter; backdating consent; confusing the board's supervisory role with executive management.