According to the applicable legislation, business management and strategic management of a company is within the scope of activity of the statutory authority, unless the founding legal acts specify otherwise. While no instructions may be given to members of the statutory authority regarding business management, in the area of strategic management, a general meeting may give instructions to the statutory authority.  

• Strategic management vs business management

The dividing line between strategic management and business management is often relatively vague. The Supreme Court also commented on this, for example recently in its decision under file no. 27 Cdo 1873/2019, where, among other things, it reached the conclusion that the issue of ensuring financing of a company may belong in both categories.

The Supreme Court deduced that if it is a question of ensuring financial means for regular operation, it is a matter belonging to business management. If it is a matter of ensuring financial means for example for significant new projects, it is strategic management and instructions may be given for it at the general meeting.

• Shareholder agreements

In this context, the Supreme Court also commented on the question of applicability of shareholder agreements in the area of giving instructions on business management. If the shareholder agreement bound shareholders to give instructions on business management to members of the statutory authority and to also ensure their fulfilment, even in case this were contrary to their obligation to act with due managerial care, such a shareholder agreement would not be applicable in this section. On the other hand, the commitment of a shareholder to intercede with a member of the statutory authority for a particular solution of a matter or for achieving a specific result is not ruled out.

• What does it mean in practice?

The Supreme Court therefore has not fully ruled out arrangements in shareholder agreements, in which one of the shareholders undertakes to de facto attempt intervening in business management. The specific formulation of the commitment will always be important and it needs to be approached with caution.

• Our services

We will help our clients determine, when it is an instruction not permitted by law (business management) and when these are principles and instructions of strategic (conceptual) nature. We may also help with the preparation of shareholder agreements or partner agreements.