Joint Stock Companies (“JSCs”) with a one-tier management system that are not subject audit obligations are usually managed by a Board of Directors (“BoD”) or if just one person is nominated, a Sole Director (“SD”) exercising all executive powers. The BoD is appointed to manage the Company, whilst the Chairman of the BoD is usually entitled to represent the Company towards third parties. The BoD or General Meeting of Shareholders (“GM”) may decide to delegate certain functions to a Sole Manager (“SM”) or to an Executive Board (“EB”). For JCSs with a one-tier management system subject to audit obligations, the BoD only retains certain basic functions (such as the establishment of the main activities and development directions, the establishment of the accounting and financial control systems, as well as the approval of the financial plans, naming and revoking the EB, preparing the annual report, convening the GM while the day-to-day running of the Company is delegated to a  SM or to the EB.

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Division of Duties: Unless the JSC is managed by a SD, the corporate governance is performed by the BoD - a collective decision body, headed by a Chairman and conducting meetings regularly (not less than once every 3 months). The BoD is required to take all necessary and useful measures for the fulfilment of the object of activity of the JSC, with the exception of any duties entrusted by law or the Articles of Association (“AoA”) to the GM. BoD decisions are taken with a simple majority vote. The BoD reports to the GM and must implement GM decisions or see such decisions are implemented by the EB. If the Company is not subject to audit obligations, the BoD takes day-to-day management decisions and the Chairman of the BoD usually has the power to bind the Company towards third parties. However, the AoA may also provide for joint representation of the Company by 2 or more BoD members. The AoA may further limit the BoDs powers as the GM sees fit (e.g. by specifying contract value caps, types of decisions/fields of activity). If the Company is subject to audit obligations (or, nevertheless, if the GM so chooses), the BoD only undertakes the basic functions listed above and delegates the day-to-day running and representation of the Company to the EB. In such a case, the BoD only provides control and oversight of the EB.

Composition: If the Company is not subject to audit obligations, it may be governed by a SD only. If the Company is subject to audit obligations the BoD must consist of an uneven number of BoD members, no less than 3. If the management and representation of the Company is delegated to an SM or to the EB, the EB members may also be part of the BoD. However, the BoD must be composed by a majority of non-EB members. The BoD members may not be employees of the Company. The BoD members may be natural or legal persons, having either Romanian or foreign nationality. Legal person BoD members must designate a natural person representative who will be liable for decisions taken.

Appointment/Dismissal Competence: The SD/BoD members (as the case may be) are appointed by the GM, with the exception of the first SD/BoD members which are appointed by the AoA at the date of incorporation. The SD/ BoD members are appointed for a 4 year maximum term, which can, however, be extended for successive periods of up to 4 years indefinitely (as an exception, the first SD/ BoD members are appointed for an initial maximum 2 year term, which can, however, be extended for successive periods of up to 4 years indefinitely). The Chairman of the BoD is chosen by the BoD or appointed directly by the GM. The position of SD or BoD member can be revoked at any time. In some cases, if the revocation decision is unjustified, the revoked SD/BoD member may request court damages.

Alternates: N/A.

For a description of how to change the respective board members, please see the individual steps in the "Step-by-Step"-schedules below. As all information on how to change board members in Romania on the CBM Site by nature is generic (i.e. does not include specific requirements for listed companies, special requirements in statutory documents or as otherwise stipulated in any type of special law), we strongly recommend seeking legal advice with Maravela & Asociații before actually changing any board members in Romania.