1. STRUCTURE, MANAGEMENT AND CONTROL OF PE
Chapter Five
STRUCTURE, MANAGEMENT AND CONTROL OF PE
Belaynew Ashagrie, HU College of Law, 2015

2. Organization of enterprise Management of enterprise
Belaynew Ashagrie, HU College of Law, 2015

3. Doctrine of separate legal existence
The principle of separation of ownership and control
Belaynew Ashagrie, HU College of Law, 2015

4. Management Board (MB) Various types of boards:
advisory boards – that propose decisions and not make them;
functional boards – that make routine decisions of the day-to-day affairs of the enterprise;
policy boards – that have wide powers and make long-term decisions.
Belaynew Ashagrie, HU College of Law, 2015

5. Management Board
The management board of a public enterprise in Ethiopia is best categorized under policy boards.
According to the proclamation, the management board is not expected to exhibit high functionality; it is simply to formulate broad directions and policies.
Belaynew Ashagrie, HU College of Law, 2015

6. Formation and Composition of MB (Art. 12)
All the members of the MB are physical persons.
Number: 3-12
Formation: up to one third of the members of the MB can be selected by the general meeting of workers. The remaining will be appointed by the supervising authority.
Chairman: appointed from among members appointed by the supervising authority. Art. 12(3) cum 11(2) (what are the criterion? profession, experience and competence)
Term of office: 3-5 years
Belaynew Ashagrie, HU College of Law, 2015

7. Powers and duties of the MB (Art 14)
It is a policy-maker for the enterprise next to the supervising authority
It does not conflict with the powers and duties of the supervising authority under Art. 11.
The board has only an advisory, or recommendatory, function upon the issues while the SA is empowered to exercise a final say. That is to say, the policy issues are formulated by the board, but would be submitted to the SA for approval.
Belaynew Ashagrie, HU College of Law, 2015

8. Powers and duties of MB Recommendatory powers Final-decision powers
Exclusive- Art. 14(1), (2) and (7)
Approval: includes
The employment, assignment and dismissal of officers accountable to the general manager, including their salary and allowance.
Adoption of internal regulations, work program and budget
Long-term loans and credits
Sale of fixed assets that do not affect the existence of the enterprise
Belaynew Ashagrie, HU College of Law, 2015

9. Liability of MB (Art. 15) What is the basis of liability?
To whom the board members will be liable?
To the enterprise?
To third parties?
Belaynew Ashagrie, HU College of Law, 2015

10. General Manager (CEO)
The GM is an appointee of the Management Board and is accountable to the Board (Arts 14(2) & 16(2)), and thus comes second within the hierarchy of authority in the organizational structure of the enterprise.
He puts into practice policy matters decided by the Board, and he administers the daily affairs of the enterprise (Art 16(1) (i)).
The GM is the top management personnel who discharges the tasks of organizing, directing, administering and controlling the enterprise as one economic unit.
Belaynew Ashagrie, HU College of Law, 2015

11. GM
The GM is an agent of the enterprise whose agency authorization arises from the law (Art 18), and an enterprise carries out its legal activities, acquires rights and incurs liabilities primarily through the representation of the GM.
The GM represents the enterprise in all dealings with third parties and in legal proceedings brought by or against it (Art 16(1) (b)).
The GM presides over meetings of a management committee he establishes in accordance with art 16 (1) (l) of the Proclamation.
Belaynew Ashagrie, HU College of Law, 2015

12. The Necessary Staff (Art. 10(4))
PE requires the staff or employees in order to undertake its functions.
Belaynew Ashagrie, HU College of Law, 2015