A term of office is a period that is formally
prescribed under the articles of association of a
company as a period for which the relevant person is
appointed as a member of a corporate body to hold
his or her office. However, this means more a period
designed by the promoters of the company than the
actual period of a member’s service.
Significantly, a term of office is not the same as a
mandate. A term of office is more of a technical and
legal designation, indicating a period for which a member of management board is appointed to hold
his or her office. Conversely, a mandate authorizes
its holder to act in an official capacity and exercise
the rights of a member of management board.
The rule adopted in Poland is an individual term of
office which means that in the case of a management
board comprised of more than a single member, the
duration of the term of office of each of its members
is subject to assessment on an individual basis. This
means that each member of the management board
may start his or her term of office at a different time,
the terms may expire at different times, the duration
of periods over which members serve on the
management board may vary. At the same time, the
articles of association may vary the duration of the
terms of office served by different members of the
management board, e.g. by resolving that the
management board chairman is appointed for a five-
year term and the other members serve a three-year
term. There is nothing to prevent appointing one
member of management board for a definite term of
office and another for an indefinite term, and still
another for an unlimited term of office (although in
the two last cases technically speaking there is no
term of office but only a mandate to act in an official
capacity, as by definition a term of office is limited
in time). The effects of such arrangements are
subject to individual assessment for each member,
based on the rules laid down under Article 202 § 1
and 2 of the Commercial Companies Code. Another
possibility is a staggered system of management
board appointments whereby a certain number of
management board members successively step
down, either by drawing lots, based on seniority, or
otherwise. The introduction of individual terms of
office does not contradict the principle of collective
exercise of the rights and performance of the
obligations by the entire management board. This
applies in particular to conducting the affairs of the
company, adopting resolutions, etc. If the duration of
the term of office of management board members is
not laid down under the articles of association, their
term of office expires on the date the meeting of
shareholders approves the financial statements for
the company’s first financial year, and consequently
the effect of not regulating the term of office under
the company’s articles of association is equivalent to
providing that the management board members serve
a one-year term of office.
The duration of the terms of office of different
management board members may differ even if the articles of association lay down a uniform term of
office for the entire composition of the management
board. This is the case when pursuant to Article 202
§ 3 of the Commercial Companies Code
management board members are appointed for a
joint term of office. A joint term of office means that
on a specific date the mandates of all the members
serving on the management board expire on such
date, regardless of the individual duration of the term
of office of each incumbent. However, this does not
mean that all members of management board have to
individually serve throughout the management
board’s term of office. It can happen that a mandate
of one or more management board members expires
prior to the deadline provided for under the articles
of association, e.g. as a result of death, dismissal, or
resignation of a member, and a replacement is
appointed. Then the term of office of a new
management board member will not last as long as
stipulated under the company’s articles of
association but only until the end of the term of
office of the other management board members.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary
of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the
basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in
individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant
legislation or other legal development to the particular facts can be verified.