Advantages of the Unitary System of Administration for Societăți pe Acțiuni (SA)

1. Centralized Decision-Making:

   • Decisions can be made quickly without the need for extensive consultations. This allows for a clearer direction and unified strategy.

2. Simplicity in Structure:

   • With fewer layers of management, the organizational structure tends to be simpler, which can lead to more straightforward communication and efficient operations.

3. Cost-Effective:

   • Maintaining a unitary board may reduce administrative costs related to having multiple boards or committees.

4. Clear Accountability:

   • In a unitary system, the board members are directly accountable to shareholders, making it easier to evaluate performance and implement effective governance.

5. Flexibility:

   • The unitary system allows the board to be more adaptable to changes in the market or regulatory environment due to its streamlined nature.

Disadvantages of the Unitary System of Administration for Societăți pe Acțiuni (SA)

1. Overburdened Board Members:

   • With wide-ranging responsibilities, board members may struggle to dedicate adequate attention to all aspects of governance, potentially leading to oversight.

2. Limited Checks and Balances:

   • A single board can lead to a lack of diversity in perspectives, which may result in poor decision-making and increased risk of mismanagement.

3. Concentration of Power:

   • A unitary system can create a concentration of power among a few individuals, increasing the potential for conflicts of interest and reducing shareholder influence.

4. Risk of Groupthink:

   • The homogeneous nature of the board may lead to groupthink, stifling innovation and critical analysis of decisions.

5. Diminished Shareholder Engagement:

   • Shareholders may feel less engaged or informed about decisions made, leading to dissatisfaction and potential conflicts.

In summary, while the unitary system of administration offers streamlined governance and quick decision-making, it carries risks of mismanagement, lack of checks and balances, and potential disengagement from shareholders.