There are several reasons to work with a supervisory, advisory or supervisory board at some point. These include the following reasons:
- the entrepreneur or director needs a formalised advisory body;
- shareholders, voting members or other stakeholders need someone to supervise the board;
- in the case of foundations, instead of working with a director with power of attorney and a remote board, one wishes to work with a board consisting of one person and a supervisory board with extensive powers;
- there is a statutory requirement, as in the case of a statutory two-tier company or housing corporation.
Supervision and advice can be regulated in the articles of association. In some cases, it can also be done outside the articles of association. The latter makes supervision and advice slightly more informal. As a result, the supervisor has less of an external role that should create certain safeguards for the outside world.
In the past, being a commissioner or member of a supervisory board was sometimes seen as an honorary job, for which you did not have to do much. Nowadays, every supervisor should be well aware that he can also be held liable if he does not supervise adequately. See also directors' liability.
For more information on the possibilities of a supervisory body and its possible powers, please contact us. We will be happy to help.
