Article I: Audit Committee
114. The board of directors of a public company shall appoint from its members an audit committee, and the provisions of Article H shall apply thereto, mutatis mutandis.
Appointment of committee
115. (a) There shall be no less than three members of the audit committee, and all of the External Directors shall be members thereof.
(b) Neither the chairman of the board of directors nor any director who is employed by the company or who provides it with services on a permanent basis shall be members of the audit committee.
(c) A holder of control or a relative of such a person shall not be a member of the audit committee.
Members of committee
116. (a) The internal auditor of the company shall receive notices of the holding of meetings of the audit committee and shall be entitled to take part in them.
(b) The internal auditor may request that the chairman of the audit committee convene the committee to discuss such matter as he may specify in his request, and the chairman of the audit committee shall convene the committee within a reasonable time from the date of the request, if he finds reason to do so.
(c) A notice of the holding of a meeting of the audit committee at which a matter relating to the audit of financial reports is to be dealt with shall be sent to the auditor who may participate in the meeting.
Invitation to meetings
117. The functions of the audit committee shall be as follows:
(1) to locate defects in the company’s business administration, inter alia by consulting with the company’s internal auditor or with the auditor, and to make proposals to the board of directors regarding ways of correcting such defects;
(2) to decide whether to approve acts and transactions requiring the approval of the audit committee under sections 255 and 268 to 275.
Functions of audit committee
118. (a) The board of directors of a private company may appoint an audit committee consisting of its members to which the provisions of section 115(b) shall apply and the provisions of sections 115(a) and (c) shall not apply; the function of the audit committee shall be as provided in section 117.
(b) An audit committee having a function as provided in section 117(2) shall not be appointed to a private company the majority of the members of which, or their relatives, are substantial shareholders.
Audit committee in private company
Chapter 4: The General Manager
119. (a) A public company shall appoint a general manager, and may appoint more than one general manager.
(b) A private company may appoint one or more general managers; where no general manager is appointed, the company shall be managed by the board of directors.
Appointment of general manager
120. The general manager shall be liable for the current administration of the affairs of the company, within the scope of the policiesdetermined by the board of directors, and subject to its guidelines.
Liability of general manager
121. (a) The general manager shall have all managerial and executive powers not granted by this Law or by the articles of association to any other organ of the company, and shall be subject to the supervision of the board of directors.
(b) The general manager may, with the approval of the board of directors, delegate any of his powers to any other person subordinate to him.
(c) Notwithstanding the provisions of section 95, the generalmeeting of a public company may resolve that for a period of no more than three years from the date of passing the resolution to such effect, the chairman of the board of directors may be authorized to fulfil the role of general manager, or to exercise the powers of the general manager, provided that in counting the votes at the general meeting, the majority shall include at least two-thirds of the shareholders who are not holders of control in the company or their representatives present at the vote; abstaining votes shall not be taken into account in counting the votes of the said shareholders.
Powers of general manager
122. (a) The general manager shall be bound to notify the chairman of the board of directors of any extraordinary matter which is of significance to the company; where a company has no chairman of the board of directors, or where such person is prevented from fulfilling his role, the general manager shall so notify all members of the board of directors.
(b) The general manager shall submit reports to the board of directors on the matters, at the times and to the extent determined by the board of directors.
(c) The chairman of the board of directors may, at any time, on its own initiative or in accordance with the decision of the board of directors, require reports from the general manager on matters relating to the business of the company.
(d) Where a report or notification by the general manager requires an act on the part of the board of directors, the chairman of the board of directors shall convene a meeting of the board of directors without delay.
Duty to report to board of directors