[Q&A] About the Board of Supervisors & Employee Representatives

2024. 9. 27


Question: According to the new "Company Law," limited liability companies with more than 300 employees are required by law to establish a board of supervisors and appoint employee representatives. Additionally, the law stipulates that employee representatives must be included among the members of the board of directors. What are the qualification requirements for employee representative directors or employee representative supervisors, and how should they be elected?

Answer: Regarding qualification requirements, employee representative directors or employee representative supervisors have two identities. First, they must be employees of the company, thus requiring an employment relationship with the company. Second, they belong to the category of directors or supervisors, and therefore, they should be subject to the general qualification restrictions for directors, supervisors, and senior managers. Specifically, Article 178 of the "Company Law" lists the circumstances that individuals who cannot serve as directors, supervisors, or senior managers of the company.

As for the election method, the new "Company Law" stipulates that employee representative directors and employee representative supervisors should be "democratically elected through the employee representative assembly, employee assembly, or other forms." The specific election process, at present, can refer to Article 38 of the "Regulations on the Democratic Management of Enterprises," which states that "employee director and employee supervisor candidates are nominated by the company's labor union based on self-recommendation and recommendations, after fully listening to employees' opinions, and elected with the consent of the majority of the representatives of the employee representative assembly. Additionally, the election results must be reported to the higher-level labor union organization. The chairman and vice-chairman of the labor union must be selected as candidates for employee directors and employee supervisors." Furthermore, the "Opinions on Strengthening the System of Employee Directors and Employee Supervisors in Company System Enterprises" by the All-China Federation of Trade Unions also provides detailed regulations on the election process, which enterprises can refer to.

Updates !