Verwaltungsrates

Verwaltungsrates (plural) or Verwaltungsrat refers to a governance body used in several German-speaking jurisdictions. The term is applied to either the board of directors of a company or, in some municipalities, to the executive council responsible for running day-to-day administration. In Switzerland and parts of Germany and Austria, the exact role and title can vary by legal form and region, but the core idea is to supervise or administer on behalf of shareholders or citizens.

In corporate governance, the Verwaltungsrat is the board of directors that provides strategic direction and oversight. Its duties typically include appointing and supervising the executive management, approving long-term strategy, annual budgets, and financial statements, and representing the company legally and externally. The board sets risk and compliance policies and may determine dividend policy. Decisions are usually taken by majority vote, and the chairperson leads meetings and represents the board. In listed companies or those with stringent governance rules, the Verwaltungsrat may be required to maintain independence among its members and may form committees, such as audit, compensation, and governance committees, to handle specialized tasks.

Composition and term lengths vary by jurisdiction and corporate form. A Verwaltungsrat is often elected by shareholders at the general meeting or appointed by other governing bodies, and it commonly consists of a small to moderate number of members (for example, 3 to 15). Members are expected to avoid conflicts of interest and, in many jurisdictions, to meet independence requirements for certain roles.

In municipal or public-sector use, a Verwaltungsrat can function as the executive body that manages administration, personnel, and finances and implements the decisions of the legislative council. It operates under applicable laws and often includes a chair or president who leads the body’s work.

The exact powers, composition, and procedures of a Verwaltungsrates vary by country, canton, and corporate form.