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§ 316. Competence of supervisory board
The supervisory board shall plan the activities of the public limited company, organise the management of the public limited company and supervise the activities of the management board. The supervisory board shall notify the general meeting of the results of a review.
§ 317. Rights of supervisory board
- (1)
-
The supervisory board shall give orders to the management board for organisation of the management of the public limited company. The consent of the supervisory board is required for conclusion of transactions which are beyond the scope of everyday economic activities and, above all, for conclusion of transactions which bring about:
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- 1)
- the acquisition or termination of holdings in other companies;
- 2)
- the acquisition or transfer of an enterprise, or the termination of its activities;
- 3)
- the transfer or encumbrance of immovables or registered movables;
- 4)
- the foundation or closure of foreign branches;
- 5)
- the making of investments exceeding a prescribed sum of expenditure for the current financial year;
- 6)
- the assumption of loans or debt obligations exceeding a prescribed sum for the current financial year; or
- 7)
- the granting of loans or the guarantee of debt obligations if this is beyond the scope of everyday economic activities.
- (2)
-
The articles of association may prescribe that the consent of the supervisory board shall not be required, or is only required in the cases specified in the articles of association, for conclusion of transactions specified in subsection (1) of this section, and may prescribe other transactions for the conclusion of which the consent of the supervisory board is required. The articles of association may also grant the supervisory board the right to decide on other issues which are not placed within the competence of the management board or the general meeting pursuant to law or the articles of association.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
- (3)
- The consent specified in subsections (1) and (2) of this section shall not be required for conclusion of a transaction if a delay in conclusion of the transaction would bring about significant damage to the public limited company.
- (4)
- The restrictions provided for in subsections (1) and (2) of this section shall not apply with regard to third persons.
- (5)
- The supervisory board shall appoint and remove procurators.
- (6)
- In order to fulfil its tasks, the supervisory board has the right to examine all documents of the public limited company and to audit the accuracy of accounting, the existence of assets and the conformity of the activities of the public limited company with the law, the articles of association and resolutions of the general meeting.
- (7)
-
The supervisory board has the right to obtain information concerning the activities of the public limited company from the management board and to demand an activity report and preparation of a balance sheet from the management board. The supervisory board shall also approve the annual budget of the public limited company unless the articles of association place this within the competence of the general meeting.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
- (8)
-
The supervisory board shall decide on conclusion and terms and conditions of transactions with members of the management board and on the conduct of legal disputes with the members of the management board. The supervisory board shall appoint a representative of the public limited company for the conclusion of the transactions and conduct of the legal disputes.
(22.03.2000 entered into force 17.04.2000 - RT I 2000, 29, 172)
- (9)
- The supervisory board also has other rights provided by law.
§ 318. Members of supervisory board
- (1)
- The supervisory board shall have three members unless the articles of association prescribe a greater number of members. A member of the supervisory board must be a natural person with active legal capacity.
- (2)
- A member of the supervisory board need not be a shareholder.
- (3)
- (Repealed - 28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
- (4)
-
A member of the management board, a procurator, auditor, bankrupt or person from whom the right to engage in economic activity has been taken away pursuant to law shall not be a member of the supervisory board. The articles of association may prescribe other persons who shall not be members of the supervisory board.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773; 17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (5)
-
The management board shall submit a list of the members of the supervisory board to the commercial register which shall set out the names, personal identification codes and residences of the members, and the date on which the authority of each member commenced. Upon a change of the members of the supervisory board, the management board shall, within five days, submit a new list of the members of the supervisory board to the commercial register. The minutes of the general meeting at which the members were elected or other resolutions on the appointment of members of the supervisory board and the consent of each new member of the supervisory board specified in subsection 319 (1) of this Code shall be appended to the list of the members of the supervisory board.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
§ 319. Election and removal of members of supervisory board
- (1)
-
The members of the supervisory board shall be elected and removed by the general meeting. In order to elect a member of the supervisory board, his or her written consent is required.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
- (2)
-
The law or the articles of association may prescribe that not more than half of the members of the supervisory board shall be elected or appointed and removed in a manner different than provided for in subsection (1) of this section.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773; 17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941; 22.03.2000 entered into force 17.04.2000 - RT I 2000, 29, 172)
- (3)
-
A member of the supervisory board shall be elected for a term of five years unless the articles of association prescribe a shorter term of authority.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (4)
-
Upon a resolution of the general meeting, a member of the supervisory board elected by the general meeting may be removed regardless of the reason. A resolution on removal of a member of the supervisory board before expiry of his or her term of authority shall be adopted if at least two-thirds of the votes represented at the general meeting are in favour. Members of the supervisory board who are not elected by the general meeting may be removed before the term provided for in the resolution on their election or appointment by a resolution of their elector or appointor.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773; 17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (5)
- Shareholders whose shares represent at least one-tenth of the share capital may, with good reason, request the removal of a member of the supervisory board by a court.
- (6)
- On the petition of the management board, supervisory board, a shareholder or other interested person, a court may, with good reason, appoint a new member to replace a removed member of the supervisory board. The authority of the court-appointed member of the supervisory board shall continue until the election of a new member of the supervisory board by the general meeting.
§ 320. Chairman of supervisory board
The members of the supervisory board shall elect a chairman from among themselves, who shall organise the activities of the supervisory board.
§ 321. Meeting of supervisory board
- (1)
-
Meetings of the supervisory board shall be held when necessary but not less frequently than once every three months. A meeting shall be called by the chairman of the supervisory board or by a member of the supervisory board substituting for the chairman. Advance notice of at least one day shall be given of the holding of a meeting and of its agenda unless the articles of association prescribe a longer term.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (2)
-
A meeting of the supervisory board has a quorum if more than one-half of the members of the supervisory board participate. The articles of association may prescribe a greater representation requirement. A member of the supervisory board shall not be represented by another member of the supervisory board or by a third person at a meeting or in the adoption of a resolution.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (3)
- A meeting of the supervisory board shall be called if this is demanded by a member of the supervisory board, the management board, an auditor or shareholders whose shares represent at least one-tenth of the share capital.
- (3
-
An issue which is not included on the agenda in the notice may be added to the agenda by the supervisory board only if all members of the supervisory board participate in the meeting and at least three-quarters of the members of the supervisory support including the issue on the agenda.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (4)
-
Minutes shall be taken of a meeting of the supervisory board. The minutes shall be signed by all the members of the supervisory board who participate in the meeting and the recording secretary of the meeting. The dissenting opinion of a member of the supervisory board shall be entered in the minutes, which shall be confirmed by his or her signature.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (5)
-
If the requirements of law or of the articles of association are violated in the calling of a meeting of the supervisory board, the supervisory board shall not be authorised to adopt resolutions unless all the members of the supervisory board participate in the meeting.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
§ 322. Resolution of supervisory board
- (1)
- A resolution of the supervisory board shall be adopted if more than one-half of the members of the supervisory board who participate in the meeting vote in favour. The articles of association may prescribe a greater representation requirement.
- (2)
-
Each member of the supervisory board shall have one vote. A member of the supervisory board shall not have the right to abstain from voting or to remain undecided. The chairman of the supervisory board shall have the deciding vote upon an equal division of votes if so prescribed by the articles of association.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (3)
- A member of the supervisory board shall not participate in voting if approval of the conclusion of a transaction between the member and the public limited company is being decided, or if approval of the conclusion of a transaction between a third person and the public limited company is being decided if the interests of the member of the supervisory board arising from such transaction are in conflict with the interests of the public limited company.
- (4)
-
A court may, on the petition of a shareholder, or a member of the management board or supervisory board, declare invalid a resolution of the supervisory board which is in conflict with the law or the articles of association if the petition is filed within three months after adoption of the resolution.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
§ 323. Adoption of resolution without calling meeting
- (1)
- The supervisory board has the right to adopt resolutions without calling a meeting, unless the articles of association prescribe otherwise, and if all of the members of the supervisory board consent to it.
- (2)
-
The chairman of the supervisory board shall send a written draft of the resolution specified in subsection (1) of this section to all members of the supervisory board, specifying the term by which the member of the supervisory board must present his or her written position on it. If a member of the supervisory board does not give notice of whether the member is in favour of or opposed to the resolution during this term, it shall be deemed that he or she votes against the resolution.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (3)
- If a resolution is made pursuant to the procedure provided for in this section, the resolution shall be adopted if more than one-half of the votes of the members of the supervisory board are in favour unless the law or the articles of association prescribe a greater majority requirement.
- (4)
-
The chairman of the supervisory board shall prepare a record of voting on the results of voting in lieu of minutes of the meeting and shall send the record promptly to the members of the supervisory board and management board. A record of voting shall set out:
- 1)
- the business name and seat of the public limited company;
- 2)
- the adopted resolutions and the number of votes in favour (including the names of the members of the supervisory board who voted in favour of each resolution);
- 3)
-
other circumstances of importance with regard to the vote.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
- (5)
-
The written opinions of members of the supervisory board specified in subsection (4) of this section shall be an integral part of the record of voting.
(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)
§ 324. Prohibition on competition
- (1)
-
Without a resolution of the general meeting, a member of the supervisory board shall not:
- 1)
- be a sole proprietor in the area of activity of the public limited company;
- 2)
- be a partner of a general partnership or a general partner of a limited partnership which operates in the same area of activity as the public limited company;
- 3)
- be a member of a directing body of a company which operates in the same area of activity as the public limited company, except if the companies belong to one group.
- (2)
- If the activities of a member of the supervisory board are in conflict with the provisions of subsection (1) of this section, the public limited company may demand that the member of the supervisory board terminate the prohibited activity, transfer the income received from the prohibited activity to the public limited company and compensate for damage to the extent exceeding the claimed income.
- (3)
- The limitation period for a claim to terminate a prohibited activity and to transfer the income received from the prohibited activity shall be three months from the date the public limited company becomes aware of the violation of the prohibition on competition but not longer than three years after the violation of the prohibition on competition. The general limitation period shall apply to a claim for compensation of damage.
§ 325. Preservation of business secrets
- (1)
- The members of the supervisory board shall preserve the business secrets of the public limited company.
- (2)
-
The public limited company shall not claim compensation for any damage caused by violation of the obligation specified in subsection (1) of this section if the members of the supervisory board acted in accordance with a lawful resolution of the general meeting.
(28.05.96 entered into force 08.06.96 - RT I 1996, 40, 773)
§ 326. Remuneration for work by member of supervisory board
Remuneration corresponding to the tasks of a member of the supervisory board and to the economic situation of the public limited company may be paid to a member of the supervisory board, the amount of and procedure for payment of which shall be determined by a resolution of the general meeting. If a public limited company is founded without a foundation meeting, the amount and procedure for payment of remuneration to be paid to the members of the first supervisory board shall be determined by the memorandum of association.
§ 327. Liability of member of supervisory board
The members of the supervisory board shall be solidarily liable for any damage wrongfully caused by violation of the requirements of law or of the articles of association, or by failure to perform their obligations, in the same manner as members of the management board pursuant to the provisions of § 315 of this Code. A member of the supervisory board shall be released from liability to the public limited company if he or she maintained a dissenting opinion in the adoption of the resolution which was the basis for the illegal activity, and the dissenting opinion is recorded in the minutes.
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