German Law Journal
[Vol. 11 No. 02
The 2002 amendment made a difference to the cooperation of the management board and the supervisory board, since Section 111(4) required the supervisory board to establish a checklist with fundamental business decisions to be taken by the management board that need approval by the supervisory board. The supervisory board’s approval right is a powerful monitoring instrument, because the management board cannot implement any business decision requiring approval without the supervisory board having actually approved that decision.61 Therefore, the management board and the supervisory board will cooperate closely with regard to any business decision that needs to be approved by the supervisory board. For that purpose, the management board will provide the supervisory board with all information necessary to decide on fundamental decisions on a well‐informed basis. As a result, the supervisory board receives monitoring‐related information in higher quality and quantity at an early stage of the decision‐making process. Furthermore, this strengthens the supervisory board’s capability to monitor the management board more efficiently, and it forces the management board to coordinate the strategic approach with the supervisory board.62 As the management board and the supervisory board have to cooperate at an early stage in the decision‐making process, the supervisory board is able to detect and prevent corporate malfeasance more quickly and more efficiently.63 As a whole, the supervisory board becomes more involved in corporate planning, business development and risk management.64
The new provision is particularly striking, because the supervisory board has to make sure that all business decisions and transactions of fundamental importance need approval.65 Those decisions include all measures, which fundamentally change the asset, financial or earning situation of the enterprise.66 The supervisory board has to decide on which fundamental business measures require its approval bearing in mind size, structure, industry and other particularities of the company.67
61 As an exemption, the shareholders’ meeting can substitute the supervisory board’s approval with the vote of a majority whose aggregate holding equals or exceeds three‐fourth of the share capital, Section 111(4).
62 KATJA SCHÖNBERGER, DER ZUSTIMMUNGSVORBEHALT DES AUFSICHTSRATS BEI GESCHÄFTSFÜHRUNGSMAßNAHMEN DES VORSTANDS (§111 ABS. 4 S. 2‐4 AKTG), 31 (2006); LIEDER (note 2), 581.
See generally, Jan Lieder, Zustimmungsvorbehalte des Aufsichtsrats nach neuer Rechtslage, 57 DB 2251 (2004).
Regarding risk management, see, section B.I of this paper.
65 LIEDER (note 2), 584‐587; Lieder (note 63), 2252‐2253; SCHÖNBERGER (note 62), 187‐190; Ihrig & Wagner (note 55), 794; Lange (note 58), 380; different opinion Klaus J. Hopt & Markus Roth, §111, in: GROßKOMMENTAR ZUM AKTIENGESETZ (Klaus J. Hopt & Herbert Wiedemann eds., 4th ed., 2005) margin numbers 608‐618; Schiessl (note 58), 597.
See, GCGC Section 3.3; see also Lieder (note 63), 2252‐2253; UWE HÜFFER, AKTIENGESETZ §111 (8th margin number 17; SCHÖNBERGER (note 62), 106‐139. 66
See, in more detail, SCHÖNBERGER (note 62), 106‐139; Lieder (note 63), 2252‐2255.