Employment of Managing Directors
European guide to support employers
Andersen’s European Employment and Labor Law Service Line has recently launched a new edition of the European Guide to Support Employers: Employment of Managing Directors. The guide provides an overview of the regulations concerning the employment or appointment of managing directors who also hold positions within the company’s governing bodies. This guide focuses on the rules applicable mainly to limited liability companies (LLCs) in over 30 European countries.
In the complex landscape of hiring managing directors as legal representatives across European countries, there are various considerations and regulations to navigate. The employment conditions for managing directors differ from those of regular employees, shaped by both company law and labor regulations.
While the terms “managing director” and “CEO” are sometimes used interchangeably, the specific roles and titles can vary from country to country and company to company. It’s essential to review the company’s structure to grasp the distinct responsibilities associated with these positions in a particular context.
Andersen professionals Matteo Amici, Francesca Capoferri, Tatiana Karabanova, and Uberto Percivalle, in their article, provide insights into the Italian situation by analyzing aspects ranging from hiring practices, to positions of responsibility, to possible dismissal or resignation.
Each European country has its own company laws governing the incorporation, organization, and management of companies, including the role of managing directors. These laws outline general duties, responsibilities, and powers. However, managing directors, like other employees, are subject to employment laws and regulations, covering areas such as employment contracts, termination, working hours, and employee rights. Corporate governance guidelines or codes may also be in place, addressing matters like board composition, director duties, transparency, and disclosure requirements.
Employment of directors may entail tax and social security liabilities, including income tax, payroll tax, and social security contributions. European countries uphold employment equality laws, prohibiting discrimination based on factors such as gender, age, race, or disability. Additionally, specific industries such as financial services, healthcare, or energy may have additional regulations related to licensing, compliance, or professional qualifications.