DIRECTORS’ VOTING AND COMMITTEES

Question 1

Number and Qualifications

Answer 1

o The board can have as few as 1 director, but Ohio assumes 3 if the articles are silent.

o Any natural person, even a celebrity or a retired politician, can be a director.

Question 2

Term and Selection

Answer 2

o Directors ordinarily serve for a one year term.

o Directors are elected by either straight or cumulative voting.

 Exception: A “ classified ” or “staggered” board, where each class serves for several years, with the term of one class ending each year. Classified boards usually have three classes, with each class of directors serving a three-year term.

o Directors may resign at any time by delivering notice to the corporation or to the board or chair of the board.

o Director vacancies may be filled by a majority vote of the remaining directors (even if the remaining directors do not constitute a quorum), or by a vote of the shareholders.

Question 3

Director Removal

Answer 3

o Unless the bylaws say otherwise, shareholders generally can remove directors with or without cause before the end of the director’s term.

Question 4

Director Removal Exceptions

Answer 4

 Directors on a staggered or classified board can only be removed for cause;

 Directors elected by a particular class of stock can only be removed by that class; and

 Directors elected by cumulative voting cannot be removed if votes sufficient to elect the director are cast against removal.

Question 5

Director Replacement

Answer 5

o Either the shareholders or the directors can replace a director if there is a vacancy or the size of the board has been increased.

Question 6

Board Meetings

Answer 6

• Notice requirements for directors meetings are less formal than with shareholder meetings.
• Notice of the place and time of each meeting of the directors must be given to each director at least 2 days before the meeting.
• If a director signs a waiver or appears at the meeting, she waives notice.

• A director need not be physically present at the meeting, and meetings can take place
Remotely (e.g., via Skype).

Question 7

Voting Requirements Quorums

Answer 7

o A quorum of directors must be present (physically or electronically) for any directorial decisions to be valid.

o Unless the articles or bylaws set a higher or lower number, Ohio sets the quorum at a
Majority of all directors in office.

o If the numbers of directors falls below a quorum during the meeting, the quorum is lost.

o Directors may not be represented by a proxy.

Question 8

Voting Requirements Votes Required

Answer 8

o Unless the articles or bylaws set a higher number, a majority of the directors who cast a vote on the issue is required for approval of an action.

Question 9

Voting Requirements Voting Agreements

Answer 9

o An agreement between directors as to how to vote is generally unenforceable.

o Each director is expected to exercise his/her own independent judgment.

Question 10

F. Director Dissent

Answer 10

If a director wishes to avoid potential liability for a board decision from which she dissented, the director must:

o Promptly file a written dissent during the meeting or within a reasonable time
after the meeting.

o Ensure her dissent is noted in the meeting’s minutes or not vote in favor of the action; and

o Deliver written notice of her dissent to the presiding officer before its adjournment, or to the corporation immediately subsequent to the meeting