Governing Bodies of a Joint-Stock Company

Publication date: 30.08.2025

A joint-stock company (JSC) as a form of corporate organization plays a key role in the economy of Uzbekistan. The efficiency of its operation directly depends on the structure of its governing bodies and the clear distribution of powers among them. The legislation of the Republic of Uzbekistan, in particular the Law “On Joint-Stock Companies and the Protection of Shareholders’ Rights” (as amended), establishes the system of governing bodies, their competence, and the mechanism of interaction between them.

According to the law, the management of a JSC is based on the principle of separation of competencies among several bodies that ensure a balance of shareholders’ interests and the effective functioning of the company. These include:

The General Meeting of Shareholders – the supreme governing body;
The Supervisory Board – a body of strategic management and control;
The Executive Body (sole – Director/General Director or collective – Management Board);
The Revision Commission (Auditor) – a body for financial and economic control.

General Meeting of Shareholders

The General Meeting is the supreme governing body whose competence is strictly defined by law and the company’s charter. It has the authority to:

Approve the charter and amendments thereto;
Form and terminate the powers of the Supervisory Board and the Revision Commission;
Decide on the distribution of profits and payment of dividends;
Approve the annual report, balance sheet, and development strategy;
Decide on the reorganization and liquidation of the company.

A distinctive feature is that certain issues (for example, approval of the charter or liquidation) may be decided exclusively by the General Meeting and cannot be delegated to other bodies.

Supervisory Board of the Company

The Supervisory Board represents the interests of shareholders between General Meetings. Its main powers include:

Determining the company’s priority areas of activity;
Monitoring the activities of the Executive Body;
Approving major transactions and transactions with affiliated persons;
Establishing committees (audit, strategy, etc.);
Ensuring transparency and good corporate governance.

The existence of a Supervisory Board is mandatory in companies with more than 50 shareholders.

Executive Body

The Executive Body is responsible for the company’s day-to-day management. It may be sole (Director, General Director) or collective (Management Board). Its powers include:

Organizing the execution of decisions of the General Meeting and Supervisory Board;
Concluding contracts, conducting negotiations, and representing the company;
Managing property and financial resources;
Maintaining accounting records and reporting;
Hiring and dismissing employees.

The Executive Body operates on the basis of the company’s charter and internal regulations and is liable to the company and its shareholders for damages caused by its actions or inaction.

Revision Commission (Auditor)

The control body of the company is the Revision Commission (or sole auditor). It is elected by the General Meeting of Shareholders and supervises:

The company’s financial and economic activities;
The accuracy of accounting and financial reporting;
The legality of transactions;
The preservation of assets.

The Commission has the right to demand the provision of any documents and reports related to the company’s financial activities.

Interaction of Bodies and Distribution of Powers

The law establishes the principle that each body acts within its competence, while the decisions of higher bodies are binding for lower ones. The balance of powers is reflected as follows:

The General Meeting forms the Supervisory Board and the Revision Commission.
The Supervisory Board controls the Executive Body.
The Executive Body organizes operational activities.
The Revision Commission ensures independent control and reports only to the General Meeting.

The governing bodies of a JSC in Uzbekistan form a hierarchical system that ensures democratic shareholder participation, strategic oversight, and operational management. Their clearly defined powers create a legal framework for effective corporate governance, protection of shareholders’ rights, and sustainable company development.

Comparative Table of JSC Governing Bodies and Their Powers

Governing Body	Composition / Formation	Main Powers	Accountability and Liability
General Meeting of Shareholders	All shareholders of the company; held as annual or extraordinary meetings	- Approval of the charter and amendments - Election of the Supervisory Board and Revision Commission - Distribution of profits and dividends - Approval of annual report and balance sheet - Decisions on reorganization and liquidation	Supreme governing body; its decisions are binding for all other bodies
Supervisory Board	Elected by the General Meeting; mandatory if shareholders exceed 50	- Determination of strategic directions - Control over the Executive Body - Approval of major and related-party transactions - Formation of committees	Accountable to the General Meeting; liable for damages caused to the company
Executive Body (Director / Management Board)	Formed by the General Meeting or Supervisory Board (depending on the charter)	- Day-to-day management - Execution of contracts and representation - Management of finances and assets - Hiring and dismissal of employees - Maintenance of accounting and reporting	Accountable to the Supervisory Board and General Meeting; financially liable for losses
Revision Commission (Auditor)	Elected by the General Meeting of Shareholders	- Control over financial and economic activities - Verification of reports and asset preservation - Detection of violations and abuses	Accountable only to the General Meeting; its conclusions are subject to mandatory review

Thus, the JSC management system is built on hierarchy and balance of powers:

General Meeting – strategic center,
Supervisory Board – control and oversight,
Executive Body – operational management,
Revision Commission – financial supervision.

Procedure for Holding the General Meeting of Shareholders and Decision-Making

1. Types of Meetings

The law distinguishes two types of shareholders’ meetings:

Annual General Meeting – held at least once a year and includes key matters such as approval of the annual report, profit distribution, and election of management and control bodies.
Extraordinary Meeting – convened when necessary (at the request of the Supervisory Board, Revision Commission, major shareholder, etc.) to resolve urgent matters.

2. Convening and Notification of Shareholders

The decision to hold a meeting is made by the Supervisory Board.
Shareholders must be notified no later than 30 days before the meeting date.
The notice is sent to the postal or electronic address indicated in the shareholders’ register and published in the media.
It must include: the date, time, place, form (in-person / absentee), agenda, and procedure for reviewing materials.

3. Right to Participate

All shareholders listed in the register as of the record date may participate.
A shareholder may participate personally or through a proxy by power of attorney.
A quorum is reached if shareholders owning more than 50% of voting shares are present.
If a quorum is not met, a repeat meeting is scheduled.

4. Conduct of the Meeting

The meeting is opened by a Chairperson and Secretary, elected from among the shareholders or their representatives.
Discussion follows the approved agenda strictly.
Each shareholder has votes proportional to the number of ordinary shares owned.
Holders of preferred shares may vote only on specific issues (e.g., reorganization, liquidation).

5. Decision-Making Procedure

Simple Majority – most decisions are made by a majority of votes of the shareholders present.
Qualified Majority (¾ votes) – required for key matters: amendments to the charter, reorganization, liquidation, reduction of share capital.
Unanimity – required in certain cases (e.g., approval of asset valuation contributed for shares).

6. Documentation of Decisions

All decisions and meeting proceedings are recorded in a minutes document, signed by the Chairperson and Secretary.
The minutes are stored at the company and made available for shareholders’ review.
Decisions of the General Meeting are binding for all company bodies, including the Supervisory Board and the Executive Body.

Thus, the procedure of the General Meeting of Shareholders is based on the principles of transparency, equality of shareholder rights, and legal validity of adopted decisions. It guarantees that key corporate matters are resolved democratically, with the participation of all owners of capital.

Decision-Making Procedure by the General Meeting of Shareholders

Category of Decision	Examples of Issues	Required Number of Votes
Simple Majority (over 50% of votes of participants)	- Approval of annual report, balance sheet, and profit distribution - Election of members of the Supervisory Board and Revision Commission - Approval of internal regulations - Decisions on dividend payments	Simple majority of shareholders present
Qualified Majority (at least ¾ of votes of participants)	- Amendments and additions to the charter - Reduction of share capital - Reorganization (merger, division, transformation) - Liquidation of the company and appointment of a liquidation commission	At least three-quarters of votes of shareholders present
Unanimity	- Approval of the monetary valuation of assets contributed as payment for shares at establishment - Decisions by founders at incorporation (approval of charter, allocation of shares, etc.) - Other cases expressly provided by law or the charter	100% of votes of founders (shareholders) participating in the decision

Thus, the voting structure reflects the hierarchy of decision importance:

Current issues – simple majority,
Strategic and fundamental issues – qualified majority,
Exceptional cases – unanimity.