Regarding the Virtual Annual Gerneral Meeting

In July 2022, the German “Bundestag” and “Bundesrat” adopted the “Act on the Introduction of Virtual Annual General Meetings for Public Limited Companies and Amendments to the law on Cooperatives, Insolvency, and Restructuring.” The Act established virtual general meetings on a permanent basis, allowing public limited companies (“AG”), Limited partnerships with a share capital structure (“KGaA”), Mutual insurance companies (“VVaG”), and Societas Europaea (“SE”) to hold their general meetings virtually pursuant to Section 118a AktG even after the expiry of the temporary arrangements under the so-called COVID Act.

In order to hold a virtual annual general meeting, Section 118a (1), (3), and (4) AktG, requires authorisation in the articles of association either directly in the Articles of Association themselves or by authorizing the board of directors to decide that a meeting be held virtually. In either case, the relevant provision or authorization is limited to a maximum period of five years.

The BDI generally welcomed the introduction of virtual annual general meetings but noted that the new legal framework fell short of its expectations for enabling the modern and practical conduct of virtual annual general meetings.

On the Reform of Supervisory Board Law

The role and responsibilities of supervisory boards have evolved considerably in recent decades as business activities become more complex and additional statutory duties have been introduced. Particularly in larger listed companies, the role and activities of the supervisory board have changed significantly, reflecting both the professionalization of its oversight function and its greater public profile. However, the statutory framework, has undergone only selected amendmentssince the AktG came into force.

Against this backdrop, the “Working Group on Supervisory Board Law” presented key proposals to reformsupervisory board law in 2021 (see NZG 2021, 477 ff.).

The BDI supports the majority of the proposals or, at least, considers them suitable for enhancing legal certainty. This applies in particular to provisions regarding the size of the supervisory board, the handling of conflicts of interest, and supervisory board committees. Should the powers of the Chair of the Supervisory Board be defined in more detail, the legislator should confine itself to general principles, given the diversity of corporate and ownership structures.

The BDI also supports the incorporation of key provisions of the German Corporate Governance Code (“DCGK”) in law. However, in peripheral areas of stock corporation law and where no legal position has been established, the DCGK should continue to serve as the relevant point of reference.

The BDI takes a critical view of certain proposals . In particular, it opposes limiting the supervisory board’s oversight function to management measures of particular significance and fundamental matters of corporate organization. Differing from the current general reference to “management” could create new uncertainties as to the scope of the supervisory board’s oversight responsibilities and lead to gaps in oversight.

The BDI also opposes a statutory right of the supervisory board to receive direct information from subordinate employees, as it could undermine the relationship of trust with the executive board and disrupt workplace harmony. Likewise, the BDI sees no compelling need for statutory regulation regarding personal requirements for members of the supervisory board. If considered necessary, such requirements should instead be adressed in the German Corporate Governance Code.

The legislature has not yet taken up the proposals from the paper. The Scientific Association for Corporate and Commercial Law (“VGR”) revisited the topic in June 2024 as part of its proposals for a comprehensive reform of the AktG (see below).

On the Reform of the Law on Defects in Resolutions

Experts in stock corporation law have been long calling for a reform of the law on defective resolutions. The objective is to facilitate the opportunity for a lively exchange at the annual general meeting without the constant threat that errors may give rise to challenges and ultimately result in the retroactive invalidation of resolutions.

The BDI supports a reform of the law on defective resolutions. From its perspective, the reform should aim to reduce the legal risk companies face when providing information at the annual general meeting to a reasonable level. The widely advocated culture of an open and lively debate at German annual general meetings is difficult to reconcile with a legal framework that exposes companies to extensive procedural and liability risks when providing information,particularly where errors may jeopardize the validity of resolutions.

However, any reform should maintain an appropriate balance and preserve those elements of the already existing framework that have proven effective, including the approval procedure (german: “Freigabverfahren”).

Against this backdrop, the German industry, drawing on proposals from the German Jurists’ Congress (”DJT”) and the VGR (see AG 2024, 377–393), advocates for a reform of the law on defective resolutions and suggests the following specific changes.

1. The legal consequence of a successful challenge to a defective resolution should not necessarily beits retroactive invalidation. Instead, the court should have at its disposal alternative legal consequences to the annulment of the resolution, such as invalidation with ex-nunc effect, the award of damages, or a declaration that the resolution is unlawful. The appropriate legal consequence should be determined by the court on the basis of a proportionality assessment. An expedited proceeding should be introduced in which the court decides, on a preliminary basis within three months, whether the revocation of a defective resolution requiring registration with ex-tunc effect is a possible legal consequence.
2. The approval procedure under Section 246a of the AktG should be extended to all resolutions subject to registration.
3. The seperate grounds for nullity under Section 241 AktG should be retained but limited and clarified. , In particular, violations of norms protecting creditors and the public interest should continue to be covered.
4. Damages for Abuse of Legal Proceedings: Plaintiffs should be liable to the company if they have filed unfounded actions to set aside resolutions with intent or through gross negligence.

In May 2024, the resolution proposal “For Legal Certainty and a Vibrant Annual general Meeting—Need for a Reform in the Law on Defective Resolutions” submitted by the CDU/CSU parliamentary group was discussed in the Legal Affairs Committee of the German Bundestag. During the hearing, the majority of experts supported a reform of the the law on defective resolutions. However, as expected, some voices were raised opposing the reform efforts on the grounds of protecting existing shareholder rights. Ultimately, the motion was rejected by the Legal Affairs Committee.

Outlook

The coalition agreement between the CDU/CSU and the SPD dated May 5, 2025, announced a reform of the law on defective resolutions under stock corporation law to strengthen legal certainty and the competitiveness of Germany as a business location and to curb opportunities for abuse (para. 2811 et seq.).

However, a concrete legislative proposal for the announced reform has not yet been put forward.