der  Aufsichtsrat

C1

Estimated CEFR level.

/ˈaʊfˌzɪçtsʁaːt/

🧐 What exactly is an Aufsichtsrat?

Der Aufsichtsrat is the German term for a Supervisory Board. It's a governing body found in corporations (especially public limited companies - Aktiengesellschaften or AGs) and certain other organizations (like larger private limited companies - GmbHs, or cooperatives - Genossenschaften) in Germany and some other countries with a similar two-tier corporate governance system.

Its main tasks are the supervision (die Aufsicht) and advising of the Management Board (der Vorstand) as well as appointing and dismissing members of the Management Board. It also audits the annual financial statements.

Der Aufsichtsrat acts in the interest of the company and its shareholders. It often consists of representatives of the shareholders and, in larger companies, also representatives of the employees (Mitbestimmung - co-determination).

The word only takes the masculine article der, because the base word Rat (council, board) is masculine.

📝 Grammar: Der Aufsichtsrat in Detail

The word "Aufsichtsrat" is a masculine noun. It follows the strong declension pattern.

Singular Declension

Note: The Genitive and Dative endings -(e)s and -(e) are often omitted nowadays, especially in spoken language. 'Des Aufsichtsrats' and 'dem Aufsichtsrat' are more common.

Plural Declension

Example Sentences for Grammar

• Nominative: Der Aufsichtsrat tagt heute. (The supervisory board meets today.)
• Genitive: Die Entscheidung des Aufsichtsrats steht noch aus. (The decision of the supervisory board is still pending.)
• Dative: Dem neuen Mitglied im Aufsichtsrat(e) wurde gratuliert. (The new member on the supervisory board was congratulated.)
• Accusative: Die Aktionäre wählen den Aufsichtsrat. (The shareholders elect the supervisory board.)
• Plural: Die Aufsichtsräte der verschiedenen Tochtergesellschaften trafen sich. (The supervisory boards of the various subsidiaries met.)

Context: When to use "Aufsichtsrat"?

The term Aufsichtsrat is primarily used in the context of corporate governance, particularly regarding:

• Aktiengesellschaften (AGs): Public limited companies, where a supervisory board is legally required in Germany.
• Large Gesellschaften mit beschränkter Haftung (GmbHs): Private limited companies above a certain size (usually 500 employees) also require a supervisory board due to co-determination laws (Mitbestimmung).
• Genossenschaften (eG): Cooperatives often have a supervisory board as well.
• Stiftungen or Vereine: Foundations or associations sometimes have similar control bodies, though they might not always be called "Aufsichtsrat" (e.g., Kuratorium, Beirat).

You talk about the Aufsichtsrat in connection with:

⚠️ Important Distinction: Der Aufsichtsrat is not the same as der Vorstand (Management Board/Executive Board). The Vorstand manages the company's daily operations, while the Aufsichtsrat supervises and advises the Vorstand. This is a key feature of the German two-tier system.

🧠 How to Remember Aufsichtsrat

Article Mnemonic (der):

Think of the base word "der Rat" (the council/board), which is masculine in German (like der Stadtrat - city council, der Bundesrat - federal council). Since the base is masculine, der Aufsichtsrat is also masculine. Imagine a council (Rat) of supervisors – der Rat.

Meaning Mnemonic:

Break down the word: Aufsicht + Rat. Aufsicht means 'supervision' (from 'auf etwas sehen' - to look upon something). Rat means 'council' or 'board' (or 'advice'). So, it's literally a 'council (board) that provides supervision'. They 'look upon' (aufsicht) the management and form a 'council' (Rat).

🔄 Related and Opposite Terms

Similar but Different Terms:

• Beirat: Often an advisory board without the strong controlling powers of an Aufsichtsrat.
• Kuratorium: Frequently found in foundations, often with functions similar to a supervisory board.

😂 A Little Joke

Fragt der neue Vorstand den alten Hasen: "Was ist der Unterschied zwischen dem Vorstand und dem Aufsichtsrat?"
(The new management board member asks the old hand: "What's the difference between the Management Board and the Supervisory Board?")

Antwortet der alte Hase: "Ganz einfach: Der Vorstand sorgt dafür, dass der Karren fährt. Der Aufsichtsrat sorgt dafür, dass der Vorstand nicht mit dem Karren durchbrennt."
(The old hand replies: "Simple: The Management Board makes sure the cart runs. The Supervisory Board makes sure the Management Board doesn't run off with the cart.")

📜 Poem about the Aufsichtsrat

Der Vorstand lenkt, mit Plan und Tat,
(The Board directs, with plan and deed,)
doch über ihm wacht der Aufsichtsrat.
(But over them, the Supervisory Board takes heed.)
Er prüft die Zahlen, groß und klein,
(It checks the numbers, large and small,)
und schaut der Führung auf die Bein'.
(And watches management, lest they fall.)
Bestellt den Chef, gibt weisen Rat,
(Appoints the boss, gives counsel sound,)
für eine saubere Geschäftestat.
(For proper business to be found.)
Er sitzt in Sitzung, ernst und schlicht,
(It sits in meetings, earnest, plain,)
und führt gewissenhaft die Aufsicht.
(And conscientiously does supervise again.)

❓ A Little Riddle

Ich habe Mitglieder, doch bin kein Verein.
(I have members, but am not a club.)
Ich wache über Chefs, doch bin kein Polizist allein.
(I watch over bosses, but I'm not just a cop.)
Ich gebe Rat, doch bin kein Therapeut.
(I give advice, but am not a therapist.)
Ich werde oft gewählt, von Aktionärsleut'.
(I am often elected, by the shareholder group.)

Wer bin ich? (Who am I?)
... Der Aufsichtsrat (The Supervisory Board)

💡 Additional Information

Word Composition

The word "Aufsichtsrat" is a compound noun, made up of:

• Aufsicht: Meaning supervision, oversight. Comes from "auf etwas sehen" (to look upon something).
• Rat: Meaning council, board, assembly of advisors, or also the act of advising.

Together, it signifies a "council (board) that performs supervision".

The Two-Tier System (Dual Board System)

Germany and some other countries employ a so-called two-tier system (zweistufiges System) of corporate governance. This means there is a clear separation between the management body (Vorstand) and the supervisory body (Aufsichtsrat). In other countries (e.g., US, UK), a one-tier system (Monistic Board System) is more common, where a single "Board of Directors" handles both management and supervisory functions.