Issue 4 (2016)

LIMITS OF DIRECTOR’S INDEPENDENCE IN A JOINT STOCK COMPANY

Authors:

Abstract: Using a comparative legal study based on the example of Georgian and German systems of corporate governance this article reviews the issues connected to the independence of directors. On the background of the study carried out in the article, we may conclude that Georgian corporate governance model faces some problems in this regard, meaning that here we do not meet legislative order, which normatively defines standards of independence of directors of joint stock company, adopts provisions needed for provision of independence in real situation. But these are the issues, which are necessary to be arranged in order to set an effective model of corporate governance. Thus, it is important to define the question how to limit decisions made by directors, meaning whether they shall be given free choice in the field of company management. For this purpose, Georgian law on Entrepreneurs should directly define the issues of personal liability of a director, as of company manager and based on this, should ensure guarantees of relevant independence. As well as for the effective management of joint stock companies it will be better to implement, as far as possible, requirement for personal skills of a director, by applying of which the director will be able to fulfill assigned tasks in an effective manner

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