The Gazette 1974

It will be seen that this conclusion is valid regardless the method of appointment of the workers' represen- tatives to the Supervisory Board chosen by the national government in accordance with the Fifth Directive. However, the theoretical position would be slightly different depending on which of the two alternatives w as adopted. Und er the First Alternative the workers or their representatives directly appoint one-third of the Members of the supervisory board, and the shareholders appoint the remainder (subject to the possibility of appointing a representative of the public or the con- sumer or some other outside interest). Und er the Second Alternative the members of the Supervisory Board are agreed as a "slate" after negotiations between the share- holders and the workers or their representatives. Und er jhe Second Alternative a member of the Supervisory Board can only be removed from office for cause. How- e v e r , under the first system the body appointing the Member whether the shareholders or the workers or heir representatives, would have the right at any time t o remove from office a member of the Supervisory Board appointed by them. It would, therefore, in theory be °pen to the shareholders to remove or to threaten to r e r n ° ve enough of the members of the supervisory board appointed by them, and to appoint others, to ensure hat a majority of the members of the Supervisory Board ^ere willing to remove the executive director whom the . areholders wished to be rid of. In practice, however, !t is most unlikely that shareholders will be willing to ake such extreme steps in order to gain their ends, e * Ce pt in circumstances in which it was clearly desirable hat the executive director should be removed in any ^ase. If the majority of the Supervisory Board could not e found to remove the executive in question without such extreme measures being necessary, the situation w °uld be likely to be one in which the shareholders, P e rhaps due to a misconception of their own interests, ^ r e choosing to have a confrontation with the e ]Uployees. In any case it seems in general that the Clr cumstances in which this kind of situation would arise are most unlikely, and that the possibility of Shareholders getting round the principle that it is the 1 upervisory Board and not the General Meeting which

has pow'.. to remove executives from office in this way is unlikely to arise. One further comment is called for. In a small business community such as that existing in the Republic of Ireland (and even more so in Northern Ireland) all of the part-time members of the supervisory board will be likely to know all of the full-time executives on the management board by their first names. In these circum- stances it seems necessary that the duty of the Super- visory Board to remove from office any executive direc- tor who is unsuited for his position should be spelled out very clearly in the national law implementing the Fifth Directive. If this is not done, it seems to be in general at least no more likely that the Supervisory Board will remove an Executive Director who deserves dismissal than that the shareholders would do so. It is clear that Section 205 of the Companies Act, 1963, applies to non-feasance by directors or others as well as to misfeasance. It follows that Section 205 would give shareholders in an Irish company a right to peti- tion the Court if the members of the Supervisory Board were failing to exercise their powers to remove from office an Executive Director who deserves dismissal. The same situation would seem to follow from Section 201 of the Companies Act (Northern Ireland) 1960). Clearly any measure such as a Supervisory Board which increases supervision over executives in a "stew- ardship" company is desirable. It may well be that the benefits of two-tier management combined with worker participation in management substantially outweigh the diminution of shareholder democracy resulting from the change in Section 182 described above. However, it would be important if it should prove unacceptable to the EEC Commission and the other EEC governments that the ultimate right of the Irish shareholders to remove executive directors from office, at least in cer- tain circumstances (such as a deadlock on the Super- visory Board) should be retained, that consequential provisions clearly imposing on the members of the Supervisory Board the duty to remove unsatisfactory directors from office should be included in the national legislation implementing the Fifth Directive. This duty would bind the employees' representatives as well as the other members of the Supervisory Board.

I.B.A. International Code of Ethics . (1) This Code of International Ethics in no way is l a n d e d to supersede existing national or local rules of e S a l ethics or those which may from time to time be ad opted. He shall, in his practice as well as in his private life, abstain from any behaviour which may tend to dis- credit the profession of which he is a member. (3) A lawyer shall preserve independence in the dis- charge of his professional duty.

A lawyer shall not only discharge the duties imposed u pon him by his own national or local rules, but he s nall also endeavour when handling a case of an inter- na tional character to adhere to the rules of this Code subject necessarily to the rules existing in those other c °untries in which he is active. (2) A lawyer shall at all times maintain the honour an d dignity of his profession.

A lawyer, practising on his own account or in partner- ship where permissible, shall not engage in any other business or occupation if by doing so he may cease to be independent. (4) A lawyer shall treat his professional colleagues with the utmost courtesy and fairness. A lawyer who undertakes to render assistance to a 100