Who has the authority to appoint directors in an Israeli company?

The default rule places the power to appoint and remove directors with the shareholders acting in a general meeting, reflecting that directors answer to the owners of the company. Companies routinely modify this in their articles or in a shareholders' agreement, granting a major investor or a founder the contractual right to appoint one or more board seats. Such nomination rights are enforceable between the parties, though the formal appointment is still recorded as a corporate act. A director's appointment takes effect on acceptance of the role, and the company must notify the Companies Registrar (Rasham HaChavarot) of the change.

For a foreign investor, securing a board seat is usually achieved through the shareholders' agreement rather than by relying on the statutory default, because a minority holder cannot outvote the majority at a general meeting. It is important to confirm that the articles actually reflect the agreed nomination rights, since where the articles and a side agreement conflict, the articles generally prevail as against the company. Our guide to directors and corporate governance in Israel explains how board composition and duties fit together. Every appointment, resignation, or removal must be filed with the Registrar within the statutory timeframe to keep the public register accurate.

From the full guide: Directors & Corporate Governance in Israel

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