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Discharge of the board: this is how the process works during a general meeting in a sports club

The annual board report is the guidepost for every sports club. The situation of the club is forward-looking and therefore an important part of club life. But how does the discharge of the board of directors work in a club? What types are there and what happens if the actions of the board are not approved? In this article, we explain in detail how to relieve the board of directors in a sports club.

spized | Club management

February 19, 2025 |

Whats’ on this page

1. Definition: What is the discharge of the Executive Board in an association?

2. Types of discharge of the Executive Board

2.1 The actions of the Executive Board are not approved: What now?

2.2 Despite exoneration, personal liability does not end

3. When a partial discharge of the Management Board makes sense

4. Who is entitled to vote at a general meeting?

5. Discharge of the board of directors in the association - your checklist for the general meeting

Definition: What is the discharge of the Executive Board in an association?

The discharge of the Executive Board ensures that the General Meeting waives retroactive claims for damages against the members of the Executive Board and releases them from personal liability. The discharge of the Executive Board is therefore also a vote of confidence by the members. However, this only applies to matters that were known to the members at the meeting. The discharge is therefore not to be equated with a fundamental release.

Incidentally, the law does not provide for a legal entitlement to the discharge of the members of the Executive Board. There is only an entitlement if this is enshrined in the articles of association. It is important that the members are fully informed about all matters and can make an appropriate assessment. The mere stipulation in the articles of association that the discharge of the Management Board is an item on the agenda each year is not sufficient to give rise to a right to discharge.

Types of discharge of the Executive Board

In principle, there are two types of discharge of the Board of Directors:

Each member of the Executive Board is discharged individually or
the entire Executive Board is discharged jointly.

If there is no provision to this effect in the Articles of Association, the General Meeting decides on the type of discharge procedure. It is also possible to limit the discharge in terms of time (period of office) or subject matter (business of the Executive Board areas).

If the discharge has been carried out in the association for many years without a basis in the articles of association, you can continue to use the procedure. In such a case, a so-called “association custom” has developed, which may be practiced legitimately. The discharge of the board of directors releases the board members from liability claims. However, this only applies to points about which the members were informed in advance.

The actions of the Executive Board are not approved: What now?

First of all, there is no legal requirement that stipulates that the actions of the Management Board must be approved. The association's articles of association are always decisive. If the actions of the entire board or individual members are not approved, the general meeting disapproves of the association's management and cash management.

In addition, the members retain the option of subsequently asserting claims for damages against the members of the Board of Directors. However, there is also the option to waive this in the event of a refusal to grant discharge. If the waiver is not provided, the subsequent board must review the circumstances and, if necessary, take legal action against the previous board.

In principle, the general meeting decides whether or not to approve the actions of the entire Executive Board or individual members. Unless the articles of association provide a clearly formulated direction.

Note: If a vote is taken on the discharge of individual members of the Executive Board, these persons may not participate in the vote.

Board members who have not been discharged can, of course, defend themselves against this and take legal action to have the discharge approved. If the court approves the discharge, the Board member will receive a corresponding judgment, which is legally superior to the decision made at the General Meeting.

Despite exoneration, personal liability does not end

At a general meeting, the Board of Directors publishes a report on the activities of the previous year. The auditors then report on their findings. This is usually followed by a motion to discharge the Board of Directors so that the members can vote on it. Board members often assume that personal liability no longer applies once the actions of the Board have been approved. There are two prerequisites for this:

Cash audit: Board members must provide the auditors with clear and complete books and records. In the event of deliberate withholding of information or a lack of clarity, personal liability applies despite the resolution to discharge the auditors.
Completeness: The annual report on the association must be correct, particularly in financial terms. If the members are misled in this respect, the Board of Directors is not exempt from liability even if the actions of the Board of Directors are approved.

A practical example: During the general meeting, a member accuses the board of not having properly credited the tournament income to the association. The 1st chairman rejects the accusations and convinces the other members, whereupon the actions of the board are approved. In retrospect, it turns out that the accusations were justified. Because the accusation was discussed at the general meeting and the actions of the board were subsequently approved, there is no private claim for damages against the board. The situation is different if the issue is not raised at the general meeting.

When a partial discharge of the Management Board makes sense

In principle, the General Meeting can discharge the entire Executive Board or individual members of the Executive Board. Unless the articles of association explicitly provide for only one of the two approaches. It is also possible to subdivide the discharge even more finely and restrict it to certain areas of activity. Such a subdivision makes sense in two cases:

The club is a multi-divisional club that maintains a soccer, gymnastics and table tennis department, for example, and appoints different members of the Board of Directors for each. If the person responsible for the soccer department is not to be discharged, this does not necessarily mean that the members are also dissatisfied with the representative of the gymnastics department.
The club's Executive Board has a clear division of responsibilities, whereby one part is responsible for economic or administrative matters and the other for operational or sporting matters. If, for example, serious errors occur in the economic area, the general meeting can only vote to censure one part of the Executive Board.

Who is entitled to vote at a general meeting?

Every member present at the meeting is entitled to vote. All member groups that are not entitled to vote (often minors) are anchored in the articles of association, which forms the basis for voting rights. Board members whose discharge is being voted on are not entitled to vote. Not even if they voluntarily resign from office.

If each member of the Management Board is voted on individually, the other persons may exercise their vote if there is no joint area of responsibility. In principle, no decision-maker who was in the area of responsibility during the underlying period should vote.

Note: The actions of the Executive Board are approved by a simple majority. Exceptions to other majority requirements must be specified in the Articles of Association.

Once the discharge has been approved, the association cannot assert any claims for damages. Exception: there is deception, misrepresentation or non-disclosure that comes to light after the discharge. The discharge resolution must include the following formalities:

Period of discharge
Type of discharge (full or partial discharge)
In the case of partial discharge: Which areas were discharged and which are excluded?

Discharge of the board of directors in the association - your checklist for the general meeting

We summarize the most important information on the discharge of the Board of Directors. With this checklist, no more formalities can go wrong before, during and after the general meeting: