Board of directors

Both in an SL and in an SA, the governing body can be organized in various ways, one of which is by appointing a board of directors, where decisions are made collectively in board meetings.

Well, an observer is a person who can attend such meetings, but without being part of the board or having the status of a director. Therefore, they can closely supervise the company, but without being appointed as a director and, thus, without assuming the responsibilities that come with that position.

This figure is useful and common when an investor wants to closely follow the progress of the company. Also, for example, when a potential buyer or investor wants to have more information during an acquisition process. It may even be common in a family business to reserve the status of observer for the founding partner who retires and has handed over to their children.

In any case, if a company designates an observer, they can:

• Attend the meetings held by the Board of Directors as if they were just another director.

• Receive and request information, like any other director, about the progress of the company and, if applicable, express opinions on decision-making.

• However, the observer does not have a vote, so they do not directly intervene in decision-making, nor do they assume the responsibilities of the administrator's position.

Although this figure is usually used so that an investor can follow the company's evolution firsthand, an observer can also be designated for their experience, background, or specialized knowledge in the sector in which the company operates. . In this way, they can contribute, with this knowledge, to help the Board make better-informed decisions.