The Supervisory Board (“SB”) is an essential part of the organizational structure in Joint Stock Companies (“JSC”) which includes 3 governing bodies in the Company, where the General Meeting of Shareholders (“GM”) (in Uzbek: “aksiyadorlarning umumiy yigilishi”) and the Executive Board (“EB”) are mandatory elements. Unlike other jurisdictions, the Uzbekistan laws consider the GM to be the supreme governing body in the organizational structure of the JSC.

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Division of Duties: In general, the SB controls the overall management of the Company and supervises the activities of the EB within the scope specified in the AoA. The SB is not entitled to decide on issues which are within the GM’s competence. The SB cannot delegate its powers whatsoever to the EB. Certain management decisions by the EB require prior approval either by the GM or the SB (e.g. gross transactions, interested-parties’ transactions etc.). The SB’s members may participate in GMs in advisory capacity.  As a matter of law, the Chairman of the SB also presides both GM and SB meetings. In JSCs with less than 30 Shareholders (in Uzbek: “aksiyadorlar”), the functions of the SB can be vested in the GM. In such case, technically the SB is not established. However, as a general practice, the AoA contains provisions defining the competence of the SB. Since a duty to convene the GM is vested in the SB by law, in the case of taking over by the GM, the AoA must also specify a person or body to be dealing with convening of a GM, instead of the SB.

Composition: Although a number of SB members is to be defined by the GM in the AoA, there are certain statutory limits to apply to it. For example, in JSCs with more than 500 Shareholders, the number of the SB’s members cannot be less than 7. As for a JSC with more than 1,000 Shareholders, the SB must contain more than 9 members. Only natural persons can be SB members. No SB member can be a member of the collegial EB or a Sole Director and vice versa. No person employed for the JSC can be a SB member. As a matter of law, the SB is presided by a Chairman elected by the SB members. The qualification requirements to be met by a candidate to a SB’s member position is set forth in the AoA or a Shareholders’ Resolution.

Appointment/Dismissal Competence: As a matter of law, the SB members are appointed/dismissed by the GM (qualified majority vote, on a cumulative basis) in accordance with the order set forth in the AoA. The Chairman of the SB is elected/re-elected by its members with a simple majority vote. The SB’s members can be appointed for a term of 1 year. After the lapse of any member´s term of office, such member may be appointed anew. When it comes to a JSC with equity participation of the Government, the Government appoints its authorized representative to act on its behalf in the Company. By virtue of his/her position, a representative of the Government is a member of the SB, and he/she is not subject to election/re-election by the GM. Any and all decisions taken by the SB in the absence of the representative of the Government is considered invalid.

Alternates: The SB’s members may not transfer their voting powers to any other person, inclusive of any other SB member. In case of the SB’s Chairman absence, his/her presiding functions is conducted by another SB’s member.

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 Uzbekistan 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 Centil Law before actually changing any board members in Uzbekistan.