Peremptory Supervisory Board of Hungarian Companies

Hungarian company may appoint German-style Supervisory Board with strong decision-making powers.  

The main role of the supervisory board is to monitor the management of the company in order to safeguard the interests of the legal person. And it must be composed of persons who are independent of the management of the company and who cannot be instructed in the performance of their duties. 

The supervisory board plays a key control role in companies; and is therefore required to examine proposals submitted to the decision-making body of the company’s members or founders and to state its position on them.

In the course of its duties; the supervisory board

• may inspect the records; accounts and books of the company and
• may ask the management and employees of the company for information.
• in addition; it may examine the company’s payroll; cash; securities and goods and contracts
• and have them examined by an expert.  

Where the articles of association of the company entrust the supervisory board with the power to take or approve certain decisions falling within the competence of the management or the general meeting; the supervisory board shall be considered to be the supervisory board with discretionary powers. 

The articles of association of companies may contain provisions on assigning the right of appointment and recall of management board members and of managing directors. As well as of establishing their remuneration to the supervisory board. And on rendering the passing of certain peremptory resolutions subject to the prior consent of the Supervisory Board (Peremptory Supervisory Board). In this case members of the Supervisory Board; shall also be considered as executive officers as regards the functions of management.

The regulation on the Supervisory Board is that it allows the use of ICT; such as videoconferencing, with no need to be present in person.