Prohibition of Parallel Conduct of Board Membership and Employment in the Czech Republic and its Legal Consequences

Richard Bacek, General Counsel, Siemens, Czech Republic

The Supreme Administrative Court of the Czech Republic opened by its judgment dated 9th December 2010 further questions related to the relationship between a Czech company and its statutory directors or members of the Board of Directors or members of the Supervisory Board by defining further legal consequences of the invalidity of parallel employment in a management position and performance of function of the statutory director or member of the Board of Directors or member of the Supervisory Board, namely in relation to the social insurance which may have, however, potentially consequences also for the health insurance and tax position of the statutory directors or members of the Board of Directors or members of the Supervisory Board.

Richard Bacek joined Siemens in October 2009 as the General Counsel for the Czech Republic. Prior to October 2009, Richard worked for 9 years at CMS Cameron McKenna in Prague, since 2006 as a partner in Corporate Team. Richard Bacek graduated in 1996 at the Law Faculty of the Charles University in Prague. In 1997, Richard attended Academy of American and International Law in Dallas, TX, USA. He is a member of Czech Bar Association since 2000.

Siemens AG is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, the company has stood for technical achievements, innovation, quality, reliability and internationality. In addition, Siemens is the world’s biggest provider of ecofriendly technologies. Around €23 billion, or nearly one-third of the company’s revenue, is generated by green products and solutions. In fiscal 2009, ended on September 30, 2009, Siemens had revenue of €76.7 billion and net income of €2.5 billion. At the end of September 2009, the company had around 405,000 employees worldwide. Siemens resumed the operations of its subsidiary in the Czech Republic in 1990. Currently, with 11,000 employees, Siemens belongs among the largest employers in the Czech Republic. In the fiscal year 2008/2009, Siemens Czech Republic reported a turnover of CZK 30 bn. Further information is available at http://www.siemens.com and http://www.siemens.cz.