Aufrichtsrat is a German term that refers to the Board of Directors in a supervisory capacity. It is a corporate governance structure commonly found in Germany and some other German-speaking countries. The term "Aufsichtsrat" can be translated as "supervisory board," "board of supervisors," or "board of directors overseeing."
The Aufsichtsrat is an essential part of the two-tier board structure found in many German corporations. It represents the interests of the shareholders and supervises the management board or executive board, also known as Vorstand. This two-tier model separates the management functions from the oversight and control functions of the company.
The Aufsichtsrat consists of representatives from different stakeholders, including shareholders, employees, and sometimes even customers. It acts as a guardian of corporate governance principles, ensuring compliance with legal and ethical standards, and protecting the interests of various stakeholders.
The responsibilities of the Aufsichtsrat include appointing and dismissing members of the executive board, overseeing their performance, approving strategic decisions, monitoring financial reporting, and ensuring compliance with laws and regulations. It also has the power to make recommendations and propose changes to the executive board's actions.
In summary, the Aufsichtsrat is a supervisory board in the German corporate governance structure that oversees the management board's activities, safeguards the interests of shareholders and stakeholders, promotes good corporate governance practices, and ensures compliance with legal and ethical standards.
