Changes in company law and corporate governance

Concurrency of employment relationship and performance of the executive director’s office – After many years of back and forth, the Czech Supreme Court has resolved that it is possible for an executive director to also have an employment contract with the company, under which he/she performs business management tasks. Nevertheless, the employment contract does not establish an employment relationship between the parties, and some serious grey areas remain where the rights and obligations between the parties to the employment contract are unclear. Therefore, we recommend avoiding a situation in which an employment contract is in place between an executive director and the company. Instead, the parties should enter into an agreement on performance of the executive director’s office, covering all parties’ interests.

Executive directors and proxy holders acting together –The Czech Supreme Court has decided that a provision in the company bylaws that requires executive directors and proxies to act together on behalf of a company is void.